Dairy cows stand in a barn at Hunter Haven Farms in Pearl City, Illinois, U.S., on Friday, March 30, 2012. Milk futures for April delivery rose 1.6 percent to $15.87 per 100 pounds at Chicago Mercantile Exchange. Photographer: Daniel Acker/Bloomberg
The price of milk in the US is likely to increase next year to up to $8 a gallon from current levels of about $3.75. Daniel Acker / Bloomberg News

Forget the fiscal cliff, there's a new row being milked



You think going over the fiscal cliff might be a big deal? Wait until you get a dose of the dairy cliff.

Sad to say it but the arrival of 2013 may bring a doubling in the price of milk to as much as US$6 (Dh22.04) to $8 a gallon, up from about $3.75. For this, you can thank congress, which seems to have lost the ability to carry out its most basic functions, starting with passing legislation.

The source of the dairy cliff can be found in the failure of congress to agree on a new farm bill, which is normally renewed every five years. Not this year, and the deadline for passing a new law expires tomorrow.

The upshot is that the rules governing dairy price supports will revert to legislation adopted in 1949, forcing the government to buy milk at elevated prices. With Washington soaking up milk, market prices would follow.

How does a law from 1949 lead to a doubling of milk prices? The law sets a floor for milk prices based on dairy production costs 63 years ago, when farms were much less efficient and mechanised than they are today. Add in adjustments for inflation and a few bells and whistles and out comes a formula that requires Washington to buy milk at roughly twice the current price. That works out to about $40 per hundredweight compared with $18.56 now.

Dairy farmers probably won't mind. But everyone else down the dairy food chain would be affected, from consumers to cheese, butter and yogurt makers, who will probably resort to buying more imported milk to keep their costs in check.

This could all be averted if congress passed a new farm bill that included a minimum price floor, like the one in the legislation about to expire.

In recent years, with commodity prices at or near record highs, this floor has been lower than market prices for milk. Farmers could make more by selling their goods on the open market, and the floor never kicked in.

The deadlock over the farm bill has dragged on for half a year. The senate passed a bill that included $23 billion of cost savings during the next 10 years.

The lower house version contained $35bn in savings, though that version never came to a vote because of opposition from members who sought more savings, mainly from the food-stamp portion of the bill.

However, the US house and senate agriculture committees are working on a short-term extension to the expired farm bill, legislators and aides said last week. The proposed extension to farm legislation could be for six months to a year.

"We'll find a way" to get an extension passed, said Amy Klobuchar, a member of the senate agriculture committee, who added that the senators' preference was still to pass a complete bill.

"This is so much 'Plan B' that it's like 'Plan M' for milk," Mrs Klobuchar said.

The price of milk will not double tomorrow if congress does not act, but would likely rise gradually as supplies are removed from normal merchandising channels and instead land in US department of agriculture (USDA) storage facilities.

"USDA continues to review a variety of options for administering programmes, should permanent law become legally effective on January 1," a spokesman said.

Government buying could quickly produce a glut of milk, butter, cheese and powdered milk that would get stored in warehouses, given to food banks and exported as food aid, said Jay Gordon, a dairy farmer and executive director of the Washington State Dairy Federation, a trade organisation.

"We're not going to sit around watching the Super Bowl and eating chunks of butter," said Mr Gordon, who has about 150 cows on his farm in Washington state. "But the government has to keep buying" to keep the price up.

The threat of reverting to the 1949 law is supposed to work just like the fiscal cliff, the combined $600 billion in tax increases and spending cuts if Washington can't reach a budget deal before the new year. It seems neither has worked.

In the end, there is a lot not to like about the two proposed versions of the farm bill. A better alternative would be to end most government subsidies for the farm industry. But congressional inaction that leads to soaring milk prices is inexcusable.

* Bloomberg News, with additional reporting by Reuters

ROUTE TO TITLE

Round 1: Beat Leolia Jeanjean 6-1, 6-2
Round 2: Beat Naomi Osaka 7-6, 1-6, 7-5
Round 3: Beat Marie Bouzkova 6-4, 6-2
Round 4: Beat Anastasia Potapova 6-0, 6-0
Quarter-final: Beat Marketa Vondrousova 6-0, 6-2
Semi-final: Beat Coco Gauff 6-2, 6-4
Final: Beat Jasmine Paolini 6-2, 6-2

The End of Loneliness
Benedict Wells
Translated from the German by Charlotte Collins
Sceptre

 

 

Kathryn Hawkes of House of Hawkes on being a good guest (because we’ve all had bad ones)

  • Arrive with a thank you gift, or make sure you have one for your host by the time you leave. 
  • Offer to buy groceries, cook them a meal or take your hosts out for dinner.
  • Help out around the house.
  • Entertain yourself so that your hosts don’t feel that they constantly need to.
  • Leave no trace of your stay – if you’ve borrowed a book, return it to where you found it.
  • Offer to strip the bed before you go.
RESULTS

 

Catchweight 63.5kg: Shakriyor Juraev (UZB) beat Bahez Khoshnaw (IRQ). Round 3 TKO (body kick)

Lightweight: Nart Abida (JOR) beat Moussa Salih (MAR). Round 1 by rear naked choke

Catchweight 79kg: Laid Zerhouni (ALG) beat Ahmed Saeb (IRQ). Round 1 TKO (punches)

Catchweight 58kg: Omar Al Hussaini (UAE) beat Mohamed Sahabdeen (SLA) Round 1 rear naked choke

Flyweight: Lina Fayyad (JOR) beat Sophia Haddouche (ALG) Round 2 TKO (ground and pound)

Catchweight 80kg: Badreddine Diani (MAR) beat Sofiane Aïssaoui (ALG) Round 2 TKO

Flyweight: Sabriye Sengul (TUR) beat Mona Ftouhi (TUN). Unanimous decision

Middleweight: Kher Khalifa Eshoushan (LIB) beat Essa Basem (JOR). Round 1 rear naked choke

Heavyweight: Mohamed Jumaa (SUD) beat Hassen Rahat (MAR). Round 1 TKO (ground and pound)

Lightweight: Abdullah Mohammad Ali Musalim (UAE beat Omar Emad (EGY). Round 1 triangle choke

Catchweight 62kg: Ali Taleb (IRQ) beat Mohamed El Mesbahi (MAR). Round 2 KO

Catchweight 88kg: Mohamad Osseili (LEB) beat Samir Zaidi (COM). Unanimous decision

Temple numbers

Expected completion: 2022

Height: 24 meters

Ground floor banquet hall: 370 square metres to accommodate about 750 people

Ground floor multipurpose hall: 92 square metres for up to 200 people

First floor main Prayer Hall: 465 square metres to hold 1,500 people at a time

First floor terrace areas: 2,30 square metres  

Temple will be spread over 6,900 square metres

Structure includes two basements, ground and first floor 

KINGDOM OF THE PLANET OF THE APES

Director: Wes Ball

Starring: Owen Teague, Freya Allen, Kevin Durand

Rating: 3.5/5

MATCH INFO

CAF Champions League semi-finals first-leg fixtures

Tuesday:

Primeiro Agosto (ANG) v Esperance (TUN) (8pm UAE)
Al Ahly (EGY) v Entente Setif (ALG) (11PM)

Second legs:

October 23

Name: Peter Dicce

Title: Assistant dean of students and director of athletics

Favourite sport: soccer

Favourite team: Bayern Munich

Favourite player: Franz Beckenbauer

Favourite activity in Abu Dhabi: scuba diving in the Northern Emirates 

 

'Manmarziyaan' (Colour Yellow Productions, Phantom Films)
Director: Anurag Kashyap​​​​​​​
Cast: Abhishek Bachchan, Taapsee Pannu, Vicky Kaushal​​​​​​​
Rating: 3.5/5

The Roundup : No Way Out

Director: Lee Sang-yong
Stars: Don Lee, Lee Jun-hyuk, Munetaka Aoki
Rating: 3/5

Babumoshai Bandookbaaz

Director: Kushan Nandy

Starring: Nawazuddin Siddiqui, Bidita Bag, Jatin Goswami

Three stars

MATCH INFO

What: Brazil v South Korea
When: Tonight, 5.30pm
Where: Mohamed bin Zayed Stadium, Abu Dhabi
Tickets: www.ticketmaster.ae

COMPANY PROFILE

Name: Haltia.ai
Started: 2023
Co-founders: Arto Bendiken and Talal Thabet
Based: Dubai, UAE
Industry: AI
Number of employees: 41
Funding: About $1.7 million
Investors: Self, family and friends

The years Ramadan fell in May

1987

1954

1921

1888

COMPANY PROFILE

Company name: Klipit

Started: 2022

Founders: Venkat Reddy, Mohammed Al Bulooki, Bilal Merchant, Asif Ahmed, Ovais Merchant

Based: Dubai, UAE

Industry: Digital receipts, finance, blockchain

Funding: $4 million

Investors: Privately/self-funded