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Dairy Farmers Want Govt To Buy $150 Million Worth Of Cheese

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Thomas Phippen Associate Editor
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Desperate for relief from low milk prices, American dairy farmers are asking the government to buy 90 million pounds of cheese with taxpayer money.

“We respectfully request that [U.S. Department of Agriculture] provide $100 – $150 million in assistance, which would allow for the purchase of up to approximately 90 million pounds of cheese,” Jim Mulhern, president of the National Milk Producers Federation wrote in a letter to Agriculture Secretary Tom Vilsack Friday.

The weak milk prices are a result of a “prolonged slump in global dairy markets,” plus “a worldwide drop in import demand for dairy products, especially in China, and the Russian food import embargo that began in August 2014,” Mulhern said.

Buying up the stockpiled cheese would help dairy farmers recoup costs, Mulhern argued. Dairy farms have not slowed production, meaning they can’t cover the costs of feed for their livestock when milk prices are so low.

The USDA began a new program in 2014 to assist dairy farmers in times like these. The 2014 Farm Bill eliminated direct subsidies for the milk, and started a marginal protection program of crop insurance. Marginal dairy insurance “provides financial assistance to participating dairy producers when the margin – the difference between the price of milk and feed costs – falls below the coverage level selected by the producer,” according to the USDA.

The $11.2 million added to the milk insurance program for May and June this year will not be enough to save the dairy farms. “Due to limitations of the program approved by Congress, few dairy farmers have coverage at levels that will provide sufficient support this year,” Mulhern wrote.

American Farm Bureau President Zippy Duvall, who sent his own letter to Vilsack Monday, but only requested the USDA purchase around $50 million worth of cheese.(RELATED: Dairy Farmers Say $11 Million From USDA Not Enough To Survive)

Duvall also asked the secretary to buy the excess cheese farmers have produced under section 32, a USDA fund that sets aside about $9 million a year “to support the farm sector through the purchase of surplus commodities.” When the USDA purchases food under section 32, it typically goes into food banks and is distributed to needy families.

Even buying 90 million pounds of cheese would barely make a dent in the nation’s cheese stockpile, which added up to around 1.19 billion pounds in April.

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