August 24, 2016

U.S. Bites Into Cheese Mountain With Stockpile Purchase

 |  By: Bloomberg News

The U.S. Department of Agriculture plans to buy $20 million of stockpiled cheese to distribute to food banks and pantries nationwide in an attempt to stem farmer losses after dairy prices plummeted amid a global milk glut earlier this year.

The purchase of about 11 million pounds of cheese, which the USDA reported Tuesday in a statement, comes in addition to $11.2 million in subsidies for dairy producers announced earlier this month. A dairy lobbying group had asked for as much $150 million in cheese purchases.

Chart via Bloomberg News

"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.

A combination of plentiful supply and flagging global demand has put farmers on the back foot in recent years. Some American dairy cooperatives had so much milk this spring they were forced to dump tens of millions of pounds.