August 12, 2016

NMPF Asks USDA to Buy $100-$150 Million Worth of Cheese

 |  By: Jim Dickrell

The National Milk Producers Federation today asked Secrectary of Agriculture Tom Vilsack to purchase $100 to $150 million of cheese products for donation to the needy, saying such an action would infuse $380 million into dairy farmer income.

The purchases would utilize the United States Department of Agriculture’s Section 32 program, as well as additional authorities through the Farm Service Agency, the Food and Nutrition Service, and the Commodity Credit Corporation.

“Dairy producers here in the United States need assistance to help endure this 18-month depression in milk prices,” said Jim Mulhern, NMPF President and CEO. “This type of assistance would both help economically-strapped farmers, and also help those without ready access to nutritious dairy products.”

NMPF says $100 to $150 million could purchase “almost the equivalent of 900 million pounds of milk,” and raise milk prices 16¢/cwt. That, in turn, would bolster dairy farm income by about $380 million. For every $1 in government expenditure, dairy farm income would be raised $2.50, NMPF estimates.

The American Farm Bureau Federation (AFBF) also called on USDA  to make emergency cheese purchases, saying $50 million would purchase 28 million pounds for domestic feeding programs. “This would not only be beneficial to those in need of food, but also would help reduce the record high inventories and would provide a positive price impact for dairy producers,” says Zippy Duvall, AFBF president.

Mulhern notes that the European Union had provided nearly $450 million in direct agricultural assistance to its dairy farmers in 2015, and another $950 million in assistance this year to farmers, with “a substantial portion of which will be directed to dairy farmers.”

In a four-page letter to Vilsack, Mulhern notes: “The EU dairy industry will continue to aggressively market its large surplus of dairy products in world markets even if their annual rate of milk production growth moderates. This will hold world dairy product prices down and prolong the conditions that have given rise to the large and growing surplus of American-type cheese, even as domestic prices begin to show small, seasonal signs of recovery.”

Mulhern also asked Vilsack to work with dairy farmers to improve the Dairy Margin Protection Program: “…due to limitations of the [MPP} program approved by Congress, few dairy farmers have coverage at levels that will provide sufficient support this year. In addition to the financial assistance requested above, we would also ask that the department work with us to identify other potential avenues to further strengthen the MPP.”