US

Government Buys $20 Million Of Cheese From Surplus Stockpiles

REUTERS/Alessandro Bianchi

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Thomas Phippen Associate Editor
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The government will buy $20 million worth of cheese from private stockpiles to aid the struggling dairy industry, the U.S. Department of Agriculture (USDA) announced Tuesday.

The USDA will purchase about 11 million pounds of cheese from private inventories and distribute it to food pantries, the department said in a statement.

“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,” Agriculture Secretary Tom Vilsack said in the statement.

“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,” Vilsack said.

U.S. dairy farms worry they won’t be able to meet operating costs as result of record-low milk prices and sustained production. Several dairy and farm advocacy groups have asked USDA to buy the excess cheese 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.”

The USDA’s $20 million cheese buy comes in quite a bit lower than the amount farm groups requested. The Milk Producers Federation suggested USDA purchase between $100 million and $150 million worth of cheese in an August 12 letter to Vilsack. The Farm Bureau Federation asked the USDA to spend $50 million their own letter to the secretary. (RELATED: Dairy Farmers Want Govt To Buy $150 Million Worth Of Cheese)

Many members of Congress requested that the USDA “take action to protect all of our nation’s dairy farmers from further crisis and to aid in the expansion and maintenance of domestic markets” in a letter earlier this month. The USDA responded with $11.2 million in “safety net assistance” for dairy farmers in the Margin Protection Program, which offers subsidies when milk prices drop to a certain percentage.(RELATED: Congress Asks USDA To Bail Out Dairy Industry)

The USDA may make additional purchases, depending on how the dairy market fares this fall. “USDA will continue to look for ways within its authorities to tackle food insecurity and provide for added stability in the marketplace,” Vilsack said.

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