Cheese to Be Propped Up by Second USDA Purchase

By Casey Wooten

Oct. 11 — The Agriculture Department is going back for seconds.

The agency is buying up as much as $20 million in surplus cheese from U.S. dairy producers, according to an Oct. 11 announcement that marks the second round of cheese purchases by the USDA in two months. In August, the department bought up about $7 million worth of cheese.

The cheese buy-up signals the Agriculture Department's continued effort to serve as a backstop for farmers hit by low commodity prices over the past three years.

The USDA said it would issue a solicitation shortly, with the surplus cheese to be delivered to food banks and food assistance recipients starting March 2017.

“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,” Agriculture Secretary Tom Vilsack said in an Oct. 11 statement announcing the purchases.

The U.S. cheddar cheese block trading price is down from about $2.40 per pound in September 2014 to about $1.50 per pound in October 2016, a drop of 37 percent, according to Bloomberg data.

Broad Aid Effort

In August, the USDA paid out $11.2 million to dairy farmers as part of its margin protection program (See previous story, 08/05/16).

Across the agriculture space, low prices have triggered USDA programs to offer financial aid to farmers. The department is set to disburse more than $7 billion in subsidy payments for the 2015 crop year, driven in part by high yields in crops like corn, wheat and soybeans, the USDA said Oct. 4 (See previous story, 10/05/16).

To contact the reporter on this story: Casey Wooten in Washington at

To contact the editor responsible for this story: Heather Rothman at

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