After Congress failed to pass a farm bill earlier last year, the legislation became tangled in the end-of-the-year fiscal cliff talks as dairy subsidies were set to expire Jan. 1 and send the price of milk to $6 or $7 a gallon, double current prices. The White House and congressional leaders negotiating the fiscal cliff had agreed that the bill would somehow have to avert that "dairy cliff," but it was uncertain how.
Hoping to salvage some of their work, Stabenow and House Agriculture Committee Chairman Frank Lucas, R-Okla., crafted a last-minute extension of 2008 farm law to add to the fiscal cliff package, including help for their own state interests: fruit and vegetable growers plentiful in Michigan, and more than $600 million in emergency money for livestock producers who were affected by drought, a priority for Lucas. In addition to averting the milk price spike, their bill also contained an overhaul of dairy programs, a priority for House Agriculture's top Democrat, Collin Peterson of Minnesota.
The extension Stabenow and Lucas crafted cost around $1 billion — an amount too high and too risky for House and Senate leaders negotiating the broader fiscal cliff deal. According to aides familiar with the talks, the White House and congressional leaders wanted a farm bill extension with no major policy changes or new spending that could subject the entire fiscal cliff bill to opposition.