USDA to buy $20 million of cheese to aid dairy industry

By Bill Tomson

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WASHINGTON, Aug. 23, 2016 - USDA announced today it will spend an estimated $20 million to take about 11 million pounds of cheese off the market and reduce the surplus that has helped keep prices low.

"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," Agriculture Secretary Tom Vilsack said in a release. "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. USDA will continue to look for ways within its authorities to tackle food insecurity and provide for added stability in the marketplace."

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The National Milk Producers Federation (NMPF) was quick to thank USDA for the purchase. On Aug. 12, the group had requested that the department spend as much as $150 million to take 90 million pounds of cheese off the market.

“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 and other charitable assistance organizations that will distribute the cheese purchased by USDA,” NMPF CEO Jim Mulhern said in a statement. “We will continue to assess the economic situation facing dairy farmers, and suggest ways to help farmers endure this lengthy period of low prices. “

The USDA also announced that it will extend the deadline for dairy farmers to enroll in the Margin Protection Program (MPP). The last day to sign up will be pushed back from Sept. 30 to Dec. 16.

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Mulhern said the extension is appreciated, but again stressed the need to improve the MPP, an insurance program that was created in the 2014 farm bill.

“Giving farmers until December 16 to adjust their coverage levels for calendar year 2017 will help increase the opportunity for dairy farmers to utilize this crucial risk management tool,” he said. “We will continue to work with USDA and Congress to find ways to further improve the Margin Protection Program for dairy farmers.”

American Farm Bureau Federation President Zippy Duvall said his members “greatly appreciate” USDA's cheese purchase. “The USDA's action will help alleviate the tough realities of the market and keep family farmers in business at a time when too many are leaving,” Duvall said in a statement, noting that more than 1,200 family dairy farms went out of business last year.

 

(This story was updated at 5:50 p.m. to add comment from American Farm Bureau Federation.)  

 

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