— Capitol Hill negotiators are running out of time to finalize a farm bill extension deal, disagreeing over details like how much to pay in aid to commodity farmers.

— President-elect Donald Trump pointed to high grocery prices as a driver of his electoral victory — but said he “can’t guarantee” Americans won’t pay more for goods because of his tariff plans.

— USDA is vastly expanding its milk testing requirements as the bird flu outbreak continues to spread rapidly in dairy cattle.

IT’S MONDAY, DEC. 9. Welcome to Morning Agriculture. We’re your hosts Grace Yarrow and Meredith Lee Hill. Send tips to gyarrow@politico.com and meredithlee@politico.com follow us @Morning_Ag.

FARM BILL EXTENSION FIGHT: Senior agriculture lawmakers are still battling over a deal to extend the current 2018 farm bill. And time is running out.

Lawmakers are facing down a Dec. 31 deadline when key farm programs expire.

Democratic and Republican negotiators agree they have to attach a one-year extension of the current 2018 farm bill to the year-end funding stopgap Congress needs to pass before Dec. 20. But negotiators are locked in a tense back and forth over the details of the agreement, and what extra farm aid funding they may include.

Dems’ pitch: Senate Ag Chair Debbie Stabenow (D-Mich.) and House Ag ranking member David Scott (D-Ga.) made a new offer to GOP counterparts last week in hopes of clinching a deal, as Meredith reported. But Republicans are highly skeptical of accepting that proposal.

Lawmakers only have a few more legislative days to nail down an agreement.

“We are gonna get that done and it’s something that just simply has to be done before we leave here. I hope that it’s done sooner rather than later so you and I will have a Christmas,” Senate Ag ranking member John Boozman (R-Ark.) recently told reporters.

Details: In addition to a one-year farm bill extension, Stabenow and Scott are offering $5.31 billion in funding for commodity farmers hit by economic losses in recent years.

That’s a huge sticking point with Republicans. Boozman recently told MA that ag Republicans are seeking “tens of billions” for that aid.

The Democratic proposal also includes:

— $1.04 billion to boost crop insurance and $950 million to support specialty crop producers via ad hoc assistance.

— Incorporating roughly $14 billion in remaining climate-smart agriculture funding from the Inflation Reduction Act into the farm bill baseline, but keeping strict climate parameters. (Republicans have been pushing to remove those parameters, arguing they create red tape for farmers to access the funds.)

— Funding many of the so-called farm bill orphan programs that will otherwise run out of money.

— Establishing $15 million per year in mandatory funding for USDA’s Office of Urban Agriculture and Innovative Production, something Stabenow championed in the 2018 farm bill.

Democrats say the plan adds $10 billion in additional funding beyond the one-year farm bill extension. They’re also arguing those added funds would be paid for by incorporating the IRA funding into the farm bill baseline spending and other moves.

HOUSE AG RACE: Scott is under growing pressure to step down from his role on the House Ag panel for next year, with two challengers trying to unseat him. But, he told MA last week that he was staying in the race.

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TRUMP ON FOOD COSTS: The president-elect attributed his election win to two things — the border and grocery prices — in an interview with NBC’s “Meet the Press” that aired Sunday.

“I won on the border, and I won on groceries. Very simple word, groceries,” Trump said. “When you buy apples, when you buy bacon, when you buy eggs, they would double and triple the price over a short period of time, and I won an election based on that. We’re going to bring those prices way down.”

As loyal MA readers know, the president has limited options to lower food costs in the speedy or widespread way voters are hoping for. (Just ask Joe Biden, who struggled for much of his presidency to show Americans he was reining in grocery prices.)

Another complication: Trump said he “can’t guarantee anything” when asked whether his proposed tariffs would increase prices for American families, our Mia McCarthy wrote.

Host Kristen Welker noted to Trump that tariffs during his first administration “cost Americans some $80 billion” and that major companies like Walmart have already said these tariffs would force them to increase prices. But Trump disagreed, saying that tariffs “cost Americans nothing” and “made the economy great.” Trump also said tariffs help solve wars abroad.

Welker noted in the interview that economists agree that consumers pay higher prices because of tariffs. Trump responded by saying, “I don’t believe that.”

BRACING FOR DEPORTATION POLICY: Trump, when asked by Welker about his plans of mass deportation — and whether he still plans to deport everyone who is here illegally, said: “I think you have to do it.” He said he will start with people with a criminal history, then expand out, in the “Meet the Press” interview.

“It’s a hard – it’s a very tough thing to do. But you have to have rules, regulations, laws. They came in illegally. You know the people that have been treated very unfairly are the people that have been on line for ten years to come into the country,” Trump said. “And we’re going to make it very easy for people to come in in terms of they have to pass the test.”

The agriculture industry relies heavily on undocumented migrant workers and foreigners on work visas. Ag business groups have been worrying for weeks and pushing back against Trump allies’ deportation push, pointing out the potential fallout of such a plan on food supply and the ag sector.

Not knowing exactly how Trump’s mass deportation plans will come to fruition is creating a “vicious stress” for the industry, according to Michael Marsh, president and CEO of the National Council of Agricultural Employers.

On the Hill: The Senate Judiciary Committee, chaired by Senate Ag member Dick Durbin (D-Ill.), will hold a hearing on the consequences of mass deportations Tuesday morning.

That committee meeting will examine the “catastrophic consequences” of mass deportations on longtime residents, families and the economy, per a committee release.

RAMPING UP MILK TESTS: The Agriculture Department will dramatically increase its testing of the nation’s milk supply for bird flu under a new federal order as the agency continues to struggle to contain a bird flu outbreak in dairy cattle first confirmed in March.

The order will require testing of raw milk samples for the H5N1 strain of the bird flu virus, from various operations that handle the milk, including dairy farms, transportation companies and processing facilities, Marcia reported Friday.

Six states — California, Colorado, Michigan, Mississippi, Oregon, and Pennsylvania — will be part of USDA’s first round of testing.

That marks a considerable expansion from a previous federal order issued in the spring that required testing lactating dairy cattle before they were transported across state lines.

But the virus, which has infected roughly half of California’s dairy herds — one of the country’s top milk producing states — continues to spread, costing farmers significant financial losses and creating more opportunities for the virus to mutate into something that could spread from person to person.

“This new milk testing strategy … will provide a roadmap for states to protect the health of their dairy herds,” Agriculture Secretary Tom Vilsack said in a statement.

— Asian farmworkers are being killed in Israel’s military zones in its border regions. (The Washington Post)

— Deere & Co. is laying off 112 workers from its Iowa tractor plant, marking the sixth round of layoffs this year as demand for new farm equipment has dropped and the giant is planning a manufacturing move to Mexico. (The Quad-City Times)

— Trump’s pick to run FDA could face scrutiny of his industry ties, as a board member or adviser to several companies, including one that offers compounded GLP-1 drugs. (BioPharma Dive)

Boozman, soon to take over as Senate Ag chair, has hired Brad Weddelman as the chief economist for committee Republicans. Weddelman was previously an economist at Combest, Sell & Associates, an agricultural lobbying shop.

THAT’S ALL FOR MA! Drop us a line and send us your agriculture job announcements or events: gyarrow@politico.com, meredithlee@politico.com, marciabrown@politico.com, abehsudi@politico.com and ecadei@politico.com.