The compromise measure resulted from bipartisan discussions in the House of Representatives' Agriculture Committee and talks with colleagues in the US Senate, Frank Lucas of Oklahoma, the House panel's chairman, said in a statement Sunday.
"It is not perfect - no compromise ever is - but it is my sincere hope that it will pass the House and Senate and be signed by the President by January 1," Lucas, a Republican, said.
It was not immediately clear whether House and Senate leaders would bring the measure to a vote soon enough to avoid putting the so-called "dairy cliff" milk price spike into action.
Separately, lawmakers are working on a last-ditch effort to avert the similarly timed "fiscal cliff," when the biggest tax increases ever to hit Americans are set to start, paired with significant federal spending cuts
US Agriculture Secretary Tom Vilsack, in an interview with CNN taped Friday and aired on Sunday, urged Congress to come up with such a solution, if only an extension of the old law that expired nearly three months ago, lest milk prices start rising after January 1, 2013.
Absent a new bill or an extension of current law, milk prices would revert to rules set in 1949, the last "permanent" farm legislation in the United States. Government price supports would kick in, based on production costs 64 years ago, plus inflation. The potential retail milk price has been estimated at $6.00 to $8.00 a gallon versus current levels near $3.50. Lucas said in the statement that time had run out in Congress' current session to enact a new five-year farm bill, as farm-state lawmakers and the dairy lobby had hoped.