Feds spend $20 million to buy 11 million pounds of unwanted cheese

By Leada Gore | lgore@al.com


on August 25, 2016 at 5:57 AM, updated August 25, 2016 at 6:10 AM


The USDA is spending $20 million to purchase surplus cheese from American producers.

America has way too much cheese. And the federal government wants to do something about it.

The Department of Agriculture announced this week it will purchase 11 million pounds of cheese – worth about $20 million – to distribute to food banks around the country. The cheese will be purchased from private suppliers.

The move comes as U.S. cheese producers struggle with an oversupply problem and prices that have fallen more than 35 percent in the past two years.

Farmers had stepped up cheese production in recent years as a result of higher prices but a slow world marketplace, increased milk supplies and slower demand contributed to a now-sluggish marketplace.

The result, according to the USDA, is a cheese surplus that's at its highest level in 30 years.

"We understand that the nation's dairy producers are experiencing challenges due to market conditions and that food banks continue to see strong demand for assistance," said Agriculture Secretary Tom Vilsack.

"This commodity purchase is part of a robust, comprehensive safety net that will help reduce a cheese surplus that is at a 30-year high while, at the same time, moving a high-protein food to the tables of those most in need."

In July, 61 members of Congress – none from Alabama – wrote Vilsack to express concern over the "trouble economic challenges" facing U.S. dairy farmers.

"We have seen farm milk prices drop 40 percent since 2014 and in May, the nation's cheese stocks were recorded at their highest level since the data was first recorded in 1917," the lawmakers wrote. "Current expectations are that the dairy market will continue to struggle with depressed prices and we seek your help as we search for ways to swiftly assist our nation's struggling dairy farmers."

The USDA said it predicts dairy prices to increase later in the year but will monitor the situation and could take additional action in the fall.

The $20 million used to purchase the cheese comes from a decades old program that's part of the Agriculture Act of 1935. That act allows the USDA to set aside a portion of import duties to purchase agriculture products in order to stabilize prices. The food is then distributed to food banks, schools, international aid and prisons.

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