The federal Agriculture Department this week announced its intent to purchase $20 million in cheddar cheese products as part of efforts to help dairy farmers weather a sluggish dairy market.
The move would be the second $20 million purchase in many months as the U.S. dairy sector faces slower demand, increased inventories and low global prices. Cheese surpluses reached record levels while dairy revenues fell by 35 percent over the past two years.
"America's farming families are being called on to demonstrate their world-famous resourcefulness and resilience in the face of this current market downturn, and USDA is making use of every tool that we have to help them," said Agriculture Secretary Tom Vilsack.
Depression-era federal laws allow the USDA to purchase surplus food supplies and distribute the products through nutrition assistance programs.
In addition, Vilsack touted more than $11 million in payments to dairy farmers through the Dairy Margin Protection Program and billions in Agriculture Risk Coverage and Price Loss Coverage payments elsewhere in the agricultural supply chain.
Dairy groups lauded the move but said that more resources were needed to help farmers.
"Further changes are needed to improve the program as an effective safety net, but such changes go beyond the authority granted to USDA by Congress," the National Milk Producers Federation said in a statement. "We will continue working with Congressional leaders to seek improvements to MPP.”
The agency expects dairy prices to increase through the remainder of 2016, but Vilsack said that officials would "explore opportunities for further assistance in the coming months."
The USDA, meanwhile, also took the opportunity to point out a new report indicating that passage of the controversial Trans-Pacific Partnership trade agreement could generate $150 million to $300 million in additional U.S. dairy exports each year.
"If the U.S. does not implement TPP, U.S. dairy producers are clearly worse off and will be disadvantaged if Australia and New Zealand gain preferential access to TPP dairy markets," officials from the USDA's Office of the Chief Economist wrote in the report.
