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

September 7, 2016

In response to a request from NMPF to help America’s dairy farmers, the 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.

On August 12, National Milk sent a letter to USDA Secretary Tom Vilsack, asking the department to purchase $100 million of cheese for donation to food assistance programs. 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.

The USDA responded 12 days later by announcing a cheese purchasing program of $20 million, which will remove approximately 11 million pounds of cheese from commercial storage.

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 www.futurefordairy.com website offers informational resources and a calculator to help farmers assess their coverage for calendar year 2017.