USDA Buys Cheese To Feed Hungry And Boost Milk Prices

Aug 26, 2016

The U.S. Department of Agriculture is buying 11 million pounds of surplus cheese in an effort to feed the hungry and bolster milk prices paid to farmers.

The cheese will be distributed to food shelves and anti-hunger programs across the country. Vermont Deputy Agriculture Secretary Diane Bothfeld says the purchase should also give a slight boost to milk prices.

“It will have a small impact on prices, between probably 10 and 15 cents per 100 pounds of milk. So it is a very limited improvement,” Bothfeld says.

Dairy farmers in Vermont are seeing low prices; it's currently about $15 for 100 pounds of milk, which is below the costs of production for many farmers.

One problem is the over-supply of dairy products. The USDA purchase will reduce the surplus and may encourage cheese producers to buy more milk.

The federal government has also extended the signup period for dairy farmers to enroll in a program designed to protect them against falling milk prices.

The Dairy Margin Protection Program acts as a sort of insurance against low milk prices. Farmers buy policies that ensure a level of payment to cover production expenses above feed costs.

But the program has not been of much value to Vermont farmers because it’s pegged to the price of feed sold by grain farmers in the Midwest, where prices are generally lower than the Northeast.

The USDA has now extended by sign-up period by three months until Dec. 16, 2016. Bothfeld says that will farmers time to make a more informed choice.

She says next year’s price forecasts should be available later in 2016.

“It’s the end of August right now; there aren’t a whole lot of predictions available for what the milk price will be in January [2017]. But when you get into the months of November and December you start getting those predictions,” she said. “So having that extended may give farmers more information so they can make a more educated decision.”