USDA to Purchase $20 Million Dollars in Surplus Cheese

In the face of devastating dairy market prices, U.S. Agriculture Secretary, Tom Vilsack, paid a visit to Westby Creamery where he held a roundtable discussion with Wisconsin dairy producers. During that meeting, he announced USDA would be purchasing an additional $20 million of cheddar cheese in an effort to lower surplus.  The product will be donated to food banks and food assistance recipients.

Vilsack told the WI Farm Report staff that milk prices are projected to go up slightly in 2017, but right now dairies are handling about a 35% drop in revenue.

Vilsack also asked farmers to look at all tools available through USDA to get through this trough. In August,  $11.2 million were made in payments through the Dairy Margin Protection Program, in addition to the surplus purchases. Farmers at other points in the supply chain are also receiving aid with over $7 billion in Agriculture Risk Coverage and Price Loss Coverage payments for the 2015 crop year. He says his administration will continue to watch market prices to see where else assistance can be given and to prepare for future outcomes.

Cheese deliveries to food banks and other assistance programs are expected to begin in March 2017.

At the roundtable, Vilsack also discussed a new trade report by the USDA’s Office of the Chief Economist, which shows the potential growth in dairy trade that could hinge on the passing of the Trans-Pacific Partnership. There is a possibility of an additional $150 to $300 million in annual US dairy exports. Historically, free trade agreements have benefited US trade growth.

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