A new farm bill deal is close, says Mississippi Sen. Thad Cochran, ranking member of the Senate Agriculture Committee.

Following a meeting with the other chief negotiators of the farm bill conference committee, Cochran said while he is “pleased” at the progress made, “there are still decisions that lie ahead of us. I am hopeful that on both sides of the aisle in both bodies, we can come together on a farm bill agreement that will reform and modernize programs, produce budget savings at the same time, and provide certainty about the government’s role to producers and consumers alike.”

The veteran Republican senator also recently announced that he plans to run for re-election. In the primary, he will be challenged by Mississippi State Sen. Chris McDaniel.

A new farm bill will not be passed this year, with action expected by Congress on the new legislation sometime next January. Before heading home for Christmas break, the House passed a short-term extension of the 2008 farm bill. The Senate, still in session, will not pass an extension so as not to relieve the pressure of passing a new farm bill.

With regard to timing, Congress is walking a tightrope with the new farm legislation. Failure to pass a new farm bill in January increases the risk of a reversion to 1940s farm law and the prospect for, among other things, a spike in dairy prices. In recent weeks, Agriculture Secretary Tom Vilsack has said repeatedly that, if forced by law, the USDA will be prepared to implement the reversion.

However, many Capitol Hill observers believe that the prospect of $8-per-gallon milk during an election year will push a new farm bill through Congress.

The funding of nutrition title programs has been one of the key hang-ups for a new farm bill deal. The House version of the bill calls for $40 billion in cuts over the next decade while the Senate version would cut $4 billion.

The conferees have reportedly settled on a number close to $8 billion, a number that is sure to displease House Republicans. However, the $8 billion is also expected to be a hard sell for Democrats, many of whom balked at food stamp cuts at any level.