During a visit yesterday to Wisconsin, Agriculture Secretary Tom Vilsack announced that the U.S. Department of Agriculture is offering to purchase another $20 million of cheddar cheese. This announcement follows one made by USDA in late August to purchase approximately 11 million pounds of cheese that was also valued at $20 million.
There were few private sector bids offered and awarded under the earlier solicitation, according to industry sources. This additional USDA cheese purchase was requested by dairy farmer organizations and not by IDFA.
“We are somewhat surprised that USDA is purchasing an additional amount of cheese, given the results of the first solicitation and because USDA reports that dairy prices are expected to increase throughout the rest of the year,” said Ruth Saunders, IDFA vice president of policy and legislative affairs.
USDA will issue the solicitation for cheese soon, and deliveries to food banks and other food assistance recipients are expected to begin in March 2017.
Why Trade Agreements Matter: The Case for U.S. Dairy
At the same time, Vilsack shared details of a new report by USDA's Office of the Chief Economist that shows continued growth of the U.S. dairy sector is largely contingent on trade. The report, “Why Trade Agreements Matter: The Case for U.S. Dairy,” estimates that the Trans-Pacific Partnership could create an additional $150 million to $300 million in annual U.S. dairy exports.
Free trade agreements have contributed to the growth in U.S. dairy exports and helped to address tariff and nontariff barriers that place U.S. products at a competitive disadvantage in overseas markets. 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, USDA said, adding that the increase was driven by lower trade barriers and increased U.S. competitiveness.