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USDA Rejects Third Bid for Dried Milk Surplus Under Casein Program On September 11, the U.S. Department of Agriculture (USDA) announced that it rejected an industry offer to purchase nonfat dry milk (NFDM) for the manufacture of casein and caseinate, because the offer of 26 cents per pound was too low. USDA has rejected two similar bids offered since June.The casein program is one attempt by USDA to move the enormous NFDM surplus — more than $1.6 billion worth — that it has accumulated over the past three years. Other stock-reducing USDA programs include donations to domestic and overseas food programs. The huge NFDM stocks are a result of the ongoing misalignment between market prices and the price at which the government has been buying surplus milk products under the Dairy Price Support Program. IDFA has long suggested that USDA should consider adjusting the butter and NFDM purchase prices — often referred to as the “tilt” — under the Dairy Price Support Program to help reduce the misalignment. The agriculture secretary has the authority to adjust the purchase prices within the program two times each year.
Posted September 23, 2002
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