October 13, 2016
The US Department of Agriculture (USDA) on Tuesday, October 11, offered to purchase $20 million worth of cheddar cheese to reduce a private cheese surplus that has reached record levels.
The offer was made following a roundtable discussion between Agriculture Secretary Tom Vilsack and dairy producers near La Crosse, Wisconsin. Vilsack said the purchase would also assist food banks and other food-assistance recipients.
While USDA projects dairy prices to increase throughout the rest of the year, it said many factors have contributed to a sluggish marketplace for dairy producers including low world market prices, increased milk supplies and inventories, and slower demand. These have also contributed to a sluggish marketplace for dairy producers and caused dairy revenues to drop 35% the past two years, it added.
Section 32 of the Agriculture Act of 1935 authorises USDA to purchase surplus food to benefit food banks and families in need through its nutrition assistance programmes. "While our analysis predicts the market will improve for these hardworking men and women, reducing the surplus can give them extra reassurance while also filling demand at food banks and other organizations that help our nation's families in need", Vilsack said.
Vilsack said that earlier in August, the USDA paid distressed farmers $11.2 million through the Dairy Margin Protection Programme. This is in addition to the surplus purchase offers. "Farmers at other points in the supply chain are also receiving a boost with over $7 billion in Agriculture Risk Coverage and Price Loss Coverage payments for the 2015 crop year, which by design kick in when times are tough….For producers challenged by weather, disease and falling revenue, we will continue to ensure the availability of a strong safety net to keep them farming or ranching", he added.
The USDA said a solicitation would be issued shortly and that cheese deliveries to food banks and other food-assistance recipients are expected to begin in March 2017.-Rick Alberto