WASHINGTON, Oct. 12, 2016 - USDA says it’s planning to buy $20 million worth of domestic cheddar cheese in a renewed effort to soak up record surpluses and boost prices for dairy farmers
This will make the second $20 million purchase in about seven weeks. It was on Aug. 23 that the USDA announced the first purchase for the same reasons.
“While our analysis predicts the market will improve for these hardworking men and women (in the dairy industry), 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 a statement.
The National Milk Producers Federation has expressed thanks for the purchases, but the group had previously said USDA would need to buy at least $150 million worth of cheese – about 90 million pounds – to significantly improve prices.
Vilsack made the announcement following a meeting on Tuesday with dairy farmers in La Crosse, Wisconsin, where he also discussed how the Trans-Pacific Partnership would benefit the dairy industry.
Vilsack went to the meeting armed with a new report from the USDA’s Foreign Agricultural Service (FAS) that predicts TPP “could create an additional $150 million to $300 million in annual U.S. dairy exports.”
Dairy farmers have been supportive of the TPP, but they are also concerned that Canada will not live up to its pledges to create more access for U.S. products.
Increased market access will be key for the industry because trade is the only way the U.S. dairy sector will be able to see major growth, USDA said.
“Free trade agreements have contributed to the growth in U.S. dairy exports and helped to address tariff and nontariff barriers that disadvantage U.S. products in overseas markets,” the USDA said about the FAS report. “U.S. dairy exports to free trade agreement partners grew from $690 million in the year prior to each agreement’s entry into force to $2.8 billion in 2015, driven by lower trade barriers and increased U.S. competitiveness,” USDA said.
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