Prepare for the #CheeseBailout2k17. It will soon become a trending tag on Twitter accompanied by a mixture of cheers and grumbles.
It is no surprise that Americans love their cheese. The surprise, however, stems from the idea that American government loves cheese so much that we are willing to spend $20 million on it.
No, the government isn’t buying cheese just because they want to use the American staple to make a giant plate of nachos.
The fact of the matter is the demand for cheese has actually decreased, yet the production of cheese has greatly increased. There is simply too much cheese in America that isn’t being bought.
For once, we need to make America grate again.
America’s oversupply of cheese is a direct result of our buyers (domestic and foreign) looking elsewhere because the market is selling it at a cost they aren’t willing to pay.
This is weird, though, because according to CNBC, the price of dairy and cheese has dropped over the last two years.
The USDA plans on distributing this cheese to homeless shelters that usually do not have enough dairy products.
It is refreshing to see the excess food being put to good use rather than just being tossed.
We are glad that this strange situation will have some positive results, but we can’t help but wonder: why are we bailing out an industry that is “failing?”
Shouldn’t we let the market work itself out? The dairy industry may think this can be a reoccurring solution.
This subject is almost laughable if you just think about America buying 11 million pounds of cheese. However, when you think about the consequences/benefits of buying said 11 million pounds of cheese, it’s a more serious situation.
Despite the government buying quite a hefty amount of cheese, they barely made a dent in the surplus the dairy industry is struggling to deal with.
The increase in dairy production wouldn’t be so daunting if dairy livestock could double for other purposes. Because dairy livestock are so specific, though, this is not the case and the industry is left with the option to sink or downsize.
Or they can hope the government will show up every year to bail them out.
The dairy market ultimately needs to downsize to prevent such a surplus from happening again.
But . . . they did downsize. Twelve hundred dairy farms shut down after this surplus became a problem.
While it was not a great amount of farms closing up shop, an attempt was still made.
So why is there still so much cheese?
Surplus has been an issue for a while, as revenue has dropped 35 percent in the last few years despite the 3 percent increase in production.
On top of which, the market is trying to figure out what will happen to the cheese already set out for purchase. Some believe the price will go down due to the high supply, but there is also a possibility that it will increase again.
Another option the government has for the huge surplus is donating it to other countries, but that almost becomes more complicated than having 55 million pounds of excess cheese.
In case you were wondering — we all know you were — the cheese we have the most surplus of is American cheese. Then cheddar. So if you’re a worldly rare or stinky cheese lover hoping the surplus would bring about many delicious artisan cheese opportunities, you’re stuck with American.
