The Western States Dairy Producer Trade Association (WSDPTA) is pushing USDA to purchase 100 million pounds of cheddar cheese over the next 30 days for use in food banks, a move that would have a major impact on producer prices, the group says.
The cheese purchase from the Chicago Mercantile Exchange would not only restock depleted U.S. food banks but boost dairy prices, WSDPTA member Oregon Dairy Farmers Association said in a letter this week to USDA Secretary Tom Vilsack.
"This purchase would also bring back in line the surplus inventory of cheese that is held in inventories by retailers, wholesalers, processors and the U.S. government,” the Oregon dairy association said. "These inventories are depressing producer prices.”
The letter from the Oregon dairy group, which represents all 300 of the state's dairy producers, attributed the cheese surplus to the world economic crisis and the resulting drop in cheese exports.
"The 100-million-pound purchase would only return inventories to normal 2004-08 levels, thus there would be no reason for an increase in consumer prices,” the letter said. "Spreading the purchase out over the next 30 days would allow for the observation of market responses.”
The cheese purchase would increase the milk price received by dairy producers, thus reducing government payments in safety net programs such as MILC or the price support program, the letter noted.
"Solving this low milk price will only be achieved with the use of many steps,” said the Oregon association. "The purchase of the 100 million pounds of cheddar cheese is one of those steps.”
Formed in 2007, WSDPTA is nonprofit agricultural association comprised of several Western dairy organizations. Through the organization, they share information, identify common goals, and work jointly to develop strategies to address challenges that affect the U.S. dairy industry. In addition to the Oregon dairy association, members also include Idaho Dairymen's Association, Washington State Dairy Federation, Dairy Producers of New Mexico, Utah Dairymen's Association and Western United Dairymen.
Catherine Merlo is Western editor for Dairy Today. You can reach her at email@example.com.