Local dairy sees benefit for farmers, consumers in Farm Bill
POSTED: Friday, January 31, 2014 - 11:02am
UPDATED: Friday, January 31, 2014 - 10:09pm
Baton Rouge, LA (NBC33) — Farmers are breathing a big sigh of relief.
The U.S. House of Representatives passed a Farm Bill, and it will likely become law soon.
"What I like about it is stability," said Jeff Kleinpeter of Kleinpeter Dairy. "It gives all farmers stability in the program that we're gonna be under."
The House had support from both Democrats and Republicans in passing the first new farm bill since 2008. There have been lots of delays and temporary bills the last few years, but this one would last until 2019.
It includes a one-percent cut to food stamps, but it should drop the price of just about everything we eat.
The instability in the agriculture industry brought by the lack of a long-term federal food policy led to high prices for crops and livestock. Will a bill about to be signed, expect prices to go down throughout the supply chain, including at the grocery store.
"I would like to see about a 30 cent per gallon decrease coming soon," for milk, Kleinpeter mentioned. "Because I've never seen milk prices this high over a sustained period."
One significant change included in the new bill eliminates the direct subsidies that propped up food prices. Instead, farmers will have the option to buy subsidized insurance to protect their yields.
"And you can opt in or out of this insurance program on an annual basis," Kleinpeter explained. "So if a dairy farmer feels secure in what he's doing and doesn't need the insurance, he may not buy it one year. Well, the next year he may think things are different, there's more risk in the marketplace, he may opt to purchase that insurance that year.
"So it puts a little bit more risk on the farmer, and I think he's going to be rewarded with a little bit more profit if he manages his business right."
Kleinpeter said he followed the negotiations on Capitol Hill closely, and spoke frequently with Louisiana's congressional delegation.
"Some of our legislators contact me on a pretty regular basis and ask us what we think about certain bills," he stated. "I hope it's like that everywhere in the country, but I know it certainly is that way in Louisiana."
Two Louisiana dairies closed their doors this year, because they couldn't absorb the rising price of materials. Kleinpeter says only some of those price hikes have shown up at the grocery store.
"We've been kind of eating some of those increases and not passing them on lately," he said, "but you know, we just feel like we're part of a business, we just gotta hang in there and tough it out til prices come back down. And I think we're gonna see that decrease coming very soon."
The Senate is supposed to vote on the bill in the next few days, and they are expected to approve it, as well. The White House has said President Obama will sign the bill as soon as it lands on his desk.