America has too much cheese. Like, way too much cheese. If you took all of the extra cheese currently in storage and made life-size Statues of Liberty out of it you could make 17 of them. Too much cheese doesn't seem like a bad problem to have, but it's poking holes in the dairy industry like a block of Swiss.
Too much cheese (and milk) means that the price of cheese will stay low and dairy farmers won’t make as much money. The US government is coming to the rescue, promising to buy approximately 11 million pounds of cheese for donation to food banks. That’s about nine Washington monuments of cheddar - bring on the government cheese!
So, why so much cheese?
There are several reasons for the current abundance of Colby & Jack:
Europe - Last year the EU lifted its dairy quota system, allowing European farmers to produce as much milk and cheese as they liked – so they're not buying American cheese
Russia - Also last year, Western governments slapped sanctions on Russia for its activities in Crimea - i.e. they limited how much Russian produce they'd import. Russia retaliated with their own sanctions on American produce...including cheese
China - Two years ago China was importing a lot of American powdered milk. But the strength of the dollar has made importing American products more expensive for the Chinese, so they've stopped buying as much
What it all melts down to is the fact that three major markets, Europe, Russia, and China, just aren’t buying as many American dairy products.
More importantly though, there's an underlying production issue with the cheese market. Dairy farmers tend to respond the same way to both high dairy prices and low dairy prices: milk more cows. When prices are high they expand their herds to make more money. When prices are low they need to make up the lost income with an increase in product.
So this increase in production, combined with a decrease in the amounts purchased by other countries, has resulted in a huge surplus - around 1.2 billion pounds!
So that's more milk, more cheese
Yep. And US dairy production is at its highest level ever. American cows are expected to serve up a serious amount of milk this year. A lot of farmers expanded their herds in 2012 and 2013, when they were exporting a lot of milk. But cows, unlike machines, can’t be turned off when production is too high. Also, because milk depends on a nine month pregnancy, milk production has to be planned in advance. When there's too much milk, producers often turn it into cheese, which can be kept longer. So low demand for milk last year, means extra cheese this year.
But the trouble is that all this extra cheese means
, which means lower profits for the farmers. Which is why the government has stepped in.
How do they plan to get rid of it all?
In addition to buying up some of the surplus stock, the government already do a lot to promote the dairy industry. Remember all those Got Milk? ads? The Department of Agriculture (USDA) and other agencies spend a fair bit of money to encourage Americans to eat particular foods. This video explains how it all works in a bit more detail.
In fact the USDA and the dairy industry created the Dairy Management Inc. (DMI), a corporation that encourages people to eat more milk and cheese. It now has an annual budget of around $140 million. They convinced McDonald’s to add an extra slice of cheese on its burgers and sell more milky drinks.
This all helps the dairy producers, but some people argue that propping up the industry like this encourages even more production and risks creating an even greater glut of cheese.
Hold on, can't people just eat the cheese?
Probably not. That's a lot of cheese. Americans already eat about 35 pounds of cheese a year on average – although that's nowhere near the roughly 60 pounds a year consumed in France, or the 45 pounds a year in most other European nations. Cheese consumption is actually edging up in the US, but milk consumption is coming down. In other words, no matter how many grilled sandwiches you eat, there's still gonna be a ton of cheese left over.