Federal officials plan to buy cheese to help poor Americans who need food assistance and dairy farmers who are suffering from low prices.
Tuesday’s announcement that the U.S. Department of Agriculture will spend $20 million to buy 11 million pounds of cheese from private companies comes as the dairy industry experienced a 35 percent revenue drop in the past two years.
The USDA also announced it will extend the deadline from Sept. 30 to Dec. 16 for dairy producers to enroll in a safety net program known as the Margin Protection Program. It provides financial assistance to some dairy farmers. On Aug. 4, the USDA added $11 million to the program.
“By supporting a strong farm safety net, expanding credit options and growing domestic and foreign markets, USDA is committed to helping America’s dairy operations remain successful,” Agriculture Secretary Tom Vilsack said.
The cheese purchase comes at a time when many Americans continue to fall short financially, and food banks have reported a strain on their inventories.
Authority to make the cheese buy comes from a 1935 law.
In recent years, Minnesota has increased its cheese production as fluid milk demand has remained static. However, cheese makers have excess cheese on hand, so pay farmers less for milk.
“The combination of declining milk prices and record high cheese stocks has left many dairy farmers struggling,” said U.S. Rep. Collin Peterson of Minnesota, the top Democrat on the House Agriculture Committee. “Through this cheese purchase, both farmers and those utilizing USDA nutrition programs will get some relief.”
Peterson and other members of Congress joined farm organizations and dairy producers in asking the USDA to make the cheese purchase.
“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. “USDA will continue to look for ways within its authorities to tackle food insecurity and provide for added stability in the marketplace.”
Milk prices are expected to increase the rest of this year, the USDA reports, but low world prices, increased milk supplies and sluggish demand are expected to keep prices lower than American farmers need to make profits.
Earlier this month, Peterson said it is possible that Congress will begin working on a new farm bill soon as farm-state congressmen demand action since crop and other commodity prices are low.
On Tuesday, he said that while the new milk safety net program is better than previous ones, “as we look ahead to the next farm bill, I will be working closely with my colleagues and dairy farmers across the country to improve upon the program.”