USDA Announces Another $20M Cheese Purchase

The U.S. Department of Agriculture on Tuesday announced plans to purchase $20 million worth of cheddar cheese in continued efforts to alleviate record-level surpluses and a sluggish dairy market.

The proposal, announced following a USDA roundtable in La Crosse, Wis., is the second $20 million cheese purchase to be announced in less than two months. The purchased cheese will be distributed to food banks and other nutrition assistance programs.

The agency said that dairy revenues fell by 35 percent over the past two years amid low global prices, increased inventories and slower demand.

In addition to the cheese purchases, Agriculture Secretary Tom 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.

"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," Vilsack said.

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."

Dairy groups lauded the move but said that more help was needed to assist 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 USDA, meanwhile, took the opportunity to point to a new report showing that passage of the controversial Trans-Pacific Partnership trade agreement could result in an additional $150 million to $300 million in annual U.S. dairy exports.

"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.