WASHINGTON — The U.S. Department of Agriculture took new measures Aug. 23 to reduce the cheese surplus and help the dairy industry in this time of low prices.
The USDA will purchase about 11 million pounds of cheese from private inventories to assist food banks and pantries across the nation, while reducing a cheese surplus that is at its highest level in 30 years.
The purchase, valued at $20 million, will be provided to families in need across the country through USDA nutrition assistance programs, while assisting the markets for dairy producers, whose revenues have dropped 35 percent over the past two years.
“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.”
Responding to requests
USDA received requests from Congress, the National Farmers Union, the American Farm Bureau and the National Milk Producers Federation to make an immediate dairy purchase.
USDA also announced that it will extend the deadline for dairy producers to enroll in the Margin Protection Program (MPP) for dairy to Dec. 16, from the previous deadline of Sept. 30.
This voluntary dairy safety net program, established by the 2014 farm bill, provides financial assistance to participating dairy producers when the margin — the difference between the price of milk and feed costs — falls below the coverage level selected by the producer.
A USDA web tool, available at www.fsa.usda.gov/mpptool, allows dairy producers to calculate levels of coverage available from MPP based on price projections.
On Aug. 4, USDA announced approximately $11.2 million in financial assistance to U.S. dairy producers enrolled in MPP-Dairy, the largest payment since the program 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.
Looking ahead
While USDA projects dairy prices to increase throughout the rest of the year, many factors including low world market prices, increased milk supplies and inventories, and slower demand have contributed to the sluggish marketplace for dairy producers.
USDA said it will continue to monitor market conditions in the coming months and evaluate additional actions, if necessary, later this fall.
Positive response
The National Milk Producers Federation said it “appreciates the prompt action” by USDA, on both decisions, and said the organization will continue working with the federal government on ways to further improve the Margin Protection Program.
American Farm Bureau President Zippy Duvall, who was on a tour through Ohio this week, said this action “will help alleviate the tough realities of the market and keep family farmers in business at a time when too many are leaving.”
According to Duvall, more than 1,200 family dairy farms went out of business in 2015.
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