The US Department of Agriculture (USDA) has revealed plans to purchase approximately 11 million pounds of cheese from private inventories – the equivalent of around $20 million’s worth – to help reduce a level of surplus that has been unseen in 30 years.
The cheese will be used to assist food banks and pantries across the US, provided to families in need through USDA’s nutrition assistance programme. But it will also be used to ease a stalling dairy sector with revenues that have fallen 35% over the last two years.
The amount of surplus cheese is at its highest level for three decades.
“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. USDA will continue to look for ways within its authorities to tackle food insecurity and provide for added stability in the marketplace.”
The move has been prompted by requests from the US Congress, National Farmers Union, American Farm Bureau and National Milk Producers Federation.
USDA has also extended the deadline for dairy producers to enrol in the Margin Protection Program (MPP), which provides financial assistance to dairy producers when their margin – the difference between the price of milk and feed costs – falls below a level chosen by the producer. Earlier in August, USDA announced more than $11 million of funding for dairy producers enrolled in MPP – the largest payment since the programme began in 2014.
“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,” said Vilsack.
While USDA projects dairy prices will increase throughout the rest of the year, a number of factors – including low global market prices, increased milk supplies and inventories, and slower demand – have contributed to sluggish market performance for dairy producers.
USDA will continue to monitor market conditions in the coming months and evaluate the need for any additional action in the autumn.
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