On Tuesday, January 1, 2012, the House is scheduled to consider H.R. ___, to prevent the doubling of milk prices. The bill is sponsored by Rep. Eric Cantor (R-VA) and will be considered under a suspension of the rules, requiring a two-thirds majority vote for approval.

The bill amends current law, effective December 31, 2012, to extend for 30 days the suspension of the Permanent Price Support Authority applicable to milk and extends for 30 days the Dairy Product Price Support Program, Dairy Export Incentive Program, and Milk Income Loss Contract Program found in the Food, Conservation, and Energy Act of 2008 (7 U.S.C. 8782).

As a result of the 2008 Farm Bill expiring, so-called “permanent law” passed in 1938 and 1949 is reinstated. Under the “permanent law”,  effective January 1, 2013, certain commodities again become subject to quotas and price supports requiring the federal government to purchase certain commodities at a specific price. This would force the federal government to buy up dairy products at artificially inflated prices resulting in a doubling of the price of milk at the grocery store. These programs, along with the most recent farm law, expired Dec. 31, and farm policy has since reverted to a permanent 1949 law that requires the Agriculture Department to begin buying dairy products at a rate of $38.54 per hundredweight (cwt)—more than double the current price. This is expected to eventually lead to significantly increased consumer prices for milk and dairy products.

No CBO cost estimate was available at the time of print.