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Responding to NMPF Request, USDA Purchases $20 Million of Cheese to Help Dairy Farmers

September 7, 2016

The U.S. Department of Agriculture announced in late August that it would purchase $20 million worth of cheese as the dairy industry weathers a prolonged period of low milk prices.

The announcement by Agriculture Secretary Tom Vilsack came in response to requests for assistance from more than 60 members of Congress, as well as from NMPF, the American Farm Bureau Federation, National Farmers Union and the National Grange. In its letter, NMPF asked USDA to utilize its Section 32 program, as well as additional authorities through the Farm Service Agency, the Food and Nutrition Service, and the Commodity Credit Corporation, to purchase the cheese.

NMPF President and CEO Jim Mulhern said the organization was appreciative of USDA’s prompt action. “This cheese purchase will provide some assistance to America’s dairy farmers through increased demand for their milk, while also serving the needs of Americans who patronize food banks that will distribute the USDA purchases.”

Global dairy demand has sagged in the past two years, due primarily to a reduction in purchases by China and Russia. Meanwhile, a world-wide rise in milk production – particularly in Europe, where production quotas were removed last year – has led to an imbalance between supply and demand, pushing prices down for farmers across the globe. U.S. dairy exports have slumped, leading to a large domestic buildup of American-type cheese (between 2014 and 2016, U.S. cheese exports dropped by almost 20 percent).

Mulhern said NMPF will continue to assess the impact of the cheese purchase as markets respond during the remainder of 2016.  The USDA also announced that it is extending until December 16 the deadline for farmers to enroll in or change their coverage for next year in the dairy Margin Protection Program.  NMPF’s website offers informational resources and a calculator to help farmers assess their coverage for calendar year 2017.