Dairy farmers will receive additional assistance from the government following today's announcement by U.S. Department of Agriculture (USDA) to purchase approximately 11 million pounds of cheese and extend an application deadline.
The cheese purchase will come out of private inventories and will be donated to assist food banks nationwide. The value of the cheese comes to $20 million.
USDA's purchase would help reduce the highest cheese surplus in 30 years and increase bottom-lines for dairy farmers after a 35% reduction in revenues the last two years.
"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," says Agriculture Secretary Tom Vilsack. "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."
In addition to the cheese purchase, USDA will extend the deadline to enroll in the Margin Protection Program (MPP) for Dairy to Dec. 16, 2016. The previous deadline was Sept. 30.
Earlier in the month USDA announced approximately $11.2 million was earmarked for dairy producer financial assistance through the MPP-Dairy program. It is the largest payment since the program began 2014.
A number of groups had asked USDA for assistance in regards to Section 32 of the Agriculture Act of 1935, which allows surplus food to be purchased and donated into nutrition assistance programs. Still, the $20 million purchase does not come close to industry recommendations. National Milk Producers Federation (NMPF)asked for $100-150 million and American Farm Bureau Federation requested at least $50 million.
"This cheese purchase will provide some assistance to America's dairy farmers through increased demand for their milk,"saysJim Mulhern, President and CEO of NMPF."We will continue to assess the economic situation facing dairy farmers, and suggest ways to help farmers endure this lengthy period of low prices."
National Farmers Union (NFU) President Roger Johnson says the help is appreciated but it still won't fix the business environment dairy farmers work with.
"Current projections indicate that farm revenue from milk sales this year will drop to $31.5 billion - a $20 billion plunge from 2014 revenue highs. Even with modest price rebounds, dairy producers are draining capital reserves, or worse, going out of business," Johnson says.
USDA Helping Farmers with Backlog of Cheese