USDA Announces Cheese Purchase of $60 Million to Aid Dairy Farmers and Food Banks

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USDA News Release No. 0624.09

Contact: Jonathan Groveman 720-4178

AGRICULTURE SECRETARY VILSACK ANNOUNCES CHEESE PURCHASE OF $60 MILLION TO ASSIST STRUGGLING DAIRY PRODUCERS, AID NATION’S FOOD BANKS

WASHINGTON, Dec.18, 2009 – Agriculture Secretary Tom Vilsack today announced that approximately $60 million in cheese and cheese products will be purchased by the Commodity Credit Corporation (CCC) for use in domestic feeding programs through USDA’s Food and Nutrition Service. USDA is expediting this cheese purchase to help provide much-needed support for low-income families struggling to put nutritious food on their tables, and to deliver timely assistance to dairy farmers who have been challenged by high feed costs and low dairy prices.

“This purchase will provide food to people in need, while helping dairy producers who are facing economic challenges by increasing demand for dairy products,” said Secretary Vilsack. “The Obama Administration continues to lend assistance in any way we can to support struggling agricultural industries.”

Along with providing market benefits for U.S. dairy producers, commodity purchases such as the $60 million announced today provide much-needed food aid – in the form of high-protein cheese – to food banks across our nation. The purchase continues USDA’s long history of delivering nutritional assistance through domestic and international feeding programs, including 15 domestic nutrition programs that touch the lives of one in every five people in America each day.

This aid comes at a time when demand on the nation’s food banks has reached an all-time high. As Americans across the country work to recover from tough economic times, food banks will continue to see a record demand for nutritious meals. The USDA cheese purchase announced today is part of a broad effort to address that urgent problem by providing ongoing support for those organizations across America struggling to meet demand every day.

The 2010 Agricultural Appropriations Act authorized $60 million for the purchase of cheese and cheese products. This cheese purchase marks the second of two steps announced this week by USDA to utilize a total of $350 million authorized under the Act. Yesterday, Vilsack announced the Dairy Economic Loss Assistance Payment Program, which provides $290 million for one-time payments to eligible dairy producers.

Throughout this year, U.S. dairy farmers have struggled against worsening markets. Milk prices declined substantially through early-to-mid-2009, with the national price for milk averaging $16.80 per hundredweight (cwt.) in the fourth quarter of 2008 and averaging $12.23 per cwt. in the first quarter of 2009, a 27-percent decline. On average, the price U.S. dairy producers received for milk marketed in the summer of 2009 was about half of what it cost them to produce milk.

“USDA is committed to helping dairy producers weather current challenges in the market, and this cheese purchase serves as one more example in a long line of USDA efforts this year to provide support,” said Jim Miller, Under Secretary for Farm and Foreign Agriculture Services.

USDA has taken a number of steps in 2009 to provide relief to dairy farmers around the country. These steps include:

• Just yesterday, Agriculture Secretary Vilsack today announced the implementation of the new Dairy Economic Loss Assistance Payment (DELAP) program, which will provide $290 million for loss assistance payments to eligible dairy producers.
• USDA spent approximately $1 billion in fiscal year 2009 on purchases of dairy products under the Dairy Price Support Program and payments to producers under the Milk Income Loss Contract.
• USDA reactivated the Dairy Export Incentive Program (DEIP), to help U.S. dairy exporters meet prevailing world prices in addition to encouraging the development of international export markets in areas where U.S. dairy products are not competitive due to subsidized dairy products from other countries.
• USDA increased the amount paid for dairy products through the Dairy Product Price Support Program. USDA estimates that these increases, which were in place from August 2009 through October 2009, increased dairy farmers’ revenue by approximately $243 million.
• In March, USDA transferred approximately 200 million pounds of nonfat dry milk to USDA’s Food and Nutrition Service, which not only removed surplus inventory from the market, but also supported low-income families struggling to put nutritious food on their tables.