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Milk Melee In Congress

Back in the Depression, the only way people got milk was from a local dairy farm. So to make sure everyone could get milk, the federal government came up with a formula, setting local prices to keep the farms in business. It was never simple, reports CBS News Correspondent Diana Olick.

".42 plus current cheddar cheese price times 9.87 plus current grade A butter price," says Rep. Paul Ryan, R-Wisconsin.

Now the U.S. Agriculture Department (USDA) is trying to reform the formula and level the prices among dairy farmers. That could save consumers two cents a gallon in the supermarket.

"Now that there are refrigerated trucks in America, it makes sense to abandon 50-year-old thinking and find a new way to look at the millennium dairy industry," says Rep. Jim Ramstad, R-Minnesota.

But the plan would favor the large producers in the upper Midwest and West over the small farmers in the South and East. This is precisely why Congress is abandoning party lines and fighting along state lines over a bill to block the USDA's price plan.

"We're seeing the industry being dominated by larger and larger agribusiness corporations rather than small family-owned farms," says Rep. Bernie Sanders, I-Vermont.

Small farmers like Michael Wilcom, who has run his family farm since the 1940s.

"There's no money in it now, and if they cut the price of milk, well, a lot of dairy farmers going out of business," Wilcom says.

In frustration, New England states created a compact, a dairy cartel which is allowed to set its prices higher than the federal level. Farmers like Wilcom in Maryland want to join.

"It gives a higher price for our milk and stabilizes the price so we know what we're getting every month," Wicom says.

It also increases consumer prices by as much as 20 cents a gallon. Still, that may be the way of the future because late Wednesday, the House did vote definitively to block the Agriculture Department's new plan. Now the bill is heading for the Senate and expected to face a similar fight.

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