OMAHA (DTN) -- Congress returns this week facing a Dec. 20 deadline to approve a new funding resolution to keep the government operating, as well as potentially pass a disaster package and a farm-bill extension before wrapping up the year.

Lawmakers will be negotiating the funding and provisions of a disaster aid package after the White House earlier proposed nearly $100 billion in disaster relief. At least some lawmakers want to include specific provisions to help commodity farmers who may not have been hit by a natural disaster but have experienced price collapses this year.

(See, "GOP Senators Say Any Aid Package Needs to Help Farmers With Market-Related Disasters," https://www.dtnpf.com/…)

As far as fully funding the federal government, Congress also is mainly looking at another short-term extension, known as a Continuing Resolution, that would avoid a shutdown. But the extension would shift most of the major funding decisions for FY 2025 to the new Congress and President-elect Donald Trump early next year.

The idea of a 2024 farm bill is very likely dead, which will force Congress to once again tack on an extension of the 2018 farm bill that would likely run until Sept. 30, 2025. Lawmakers will then vow that they can surely get the job done if they just have nine more months to work on a new farm bill under a Republican-led Congress and the Trump administration. Trump signed the last farm bill at the end of 2018.

A lot of USDA programs expired at the end of September, when the last extension officially ended, but there is always an increased risk at the end of the calendar year without congressional action. If Congress fails to act, on Jan. 1, 2025, "permanent law" goes into effect, reverting to commodity programs written into law in 1938 and 1949.

Permanent law is also known as "parity" for dairy prices, as well as corn, cotton, rice and wheat. Each of those commodities would end up with price supports significantly higher than 2024 market prices. Other commodities such as soybeans and peanuts are not part of permanent law.

PERMANENT LAW AND DAIRY CLIFF

The "dairy cliff" is often mentioned as the biggest issue with permanent law. Under the law, USDA would be required to buy dairy products to help boost prices to the mandated levels of 117% higher than the current all-milk price. At current prices, around $22.80 per cwt, the mandated price for milk would jump to more than $49.43 per cwt. This would effectively drive private buyers of milk out of the market.

During the 2013 fight over the farm bill extension, the White House projected permanent law would cost $12 billion a year for taxpayers and double milk prices at the grocery store. The Congressional Research Service this year also estimated costs would be $10 billion to $12.5 billion.

"This level of intervention in the market would be expensive to the government, expensive for consumers, and disruptive to the marketplace by changing the available shares of fluid milk, butter, cheese and nonfat dry milk," the Congressional Research Service noted. "While farmers would be paid more, the disruption may jeopardize the market for dairy products."

OTHER COMMODITIES UNDER PARITY

Other commodities under permanent law are affected by parity prices and acreage allotments.

Corn would see a parity price that would offer farmers price support at $7.45 a bushel.

Wheat would see a parity price offering farmers $15.08 a bushel, but the policy also requires USDA to set acreage allotments.

Cotton would see parity prices paying out to producers at $1.59 a pound with acreage allotments also mandated.

For more information on the next administration, catch the DTN Virtual Ag Summit "New Administration ... New Markets?" on Dec. 5-6 from 9 a.m. to 11 a.m. CST. For more information and registration, go to https://dtn.link/….

Chris Clayton can be reached at Chris.Clayton@dtn.com

Follow him on social platform X @ChrisClaytonDTN

(c) Copyright 2024 DTN, LLC. All rights reserved.