The Federal Government’s Great American Cheese Stockpile

In the 1930s, the U.S. federal government established dairy subsidies to bail out America’s dairy farmers from the Great Depression. Managed by the U.S. Department of Agriculture, those same subsidies are still in effect today, where they have underwritten a massive surplus of milk in the U.S. dairy industry that far exceeds the appetites of over 327 million Americans to consume it.

But rather than reduce the subsidies to reduce the surplus to more reasonable levels, the USDA is instead paying the U.S. dairy industry to make billions of pounds of cheese from the millions and millions of gallons of surplus milk. According to Emily Moon’s reporting at Pacific Standard, the USDA now has a stockpile of 1.4 billion pounds of processed American cheese.

The United States’ dairy surplus has reached a record high, rounding out at 1.4 billion pounds of cheese. Reports attempting to quantify this astonishing amount have deferred to metrics like “enough to wrap around the U.S. Capitol.” Suffice to say, nobody’s suggesting we could consume it all.

The nation eating this much cheese is not only mind-boggling: It’s growing less and less likely. According to U.S. Department of Agriculture data, Americans have cut their milk consumption down from 35 pounds to an average of 15 per person annually. The excess is turned into cheese for storage and longevity (and the enjoyment of delicious cheese products). At the same time, government subsidies have continued to support dairy production, buying up surplus to keep prices steady. That leaves us with more cheese than anyone, even the experts, knows what to do with.

It also leads to the question of what the government has been doing with the cheese it has been buying for all these years. Beginning in the 1980s, the government’s primary solution was to give as much of it away to the poor as they can. Today, this is provided through multiple federal nutrition assistance welfare programs such as SNAP, CACFP, NCE, SFSP, WIC, and also through school lunch programs.

But in the 1990s, they also started making deals with fast food restaurant chains to incorporate more cheese products in their menus at low prices.

To help sell its surplus in the 1990s, the National Dairy Promotion Board created Dairy Management Incorporated, a semi-public marketing branch of the USDA funded through government “checkoff” fees from dairy producers. This agency gave us the “Got Milk?” campaign and a host of popular fast food menu items, including Domino’s seven-cheese pizzas and Taco Bell’s very cheesy Quesalupa. A 2017 Bloomberg Businessweek investigation called the group of chemists and nutritionists the “Illuminati of cheese.” “The checkoff [program] puts DMI’s agents inside Burger King, Domino’s, McDonald’s, Pizza Hut, and Wendy’s, where they’re privy to each restaurant chain’s most closely guarded trade secrets,” writes Clint Rainey.

There is an unintended consequence in the federal government forcing so much unwanted cheese into the diets of American consumers. It is contributing to the growing health problem of obesity.

For a federal agency dedicated to improving overall nutrition and providing dietary guidance, these partnerships may seem like a contradiction—with good reason, experts say. DMI’s efforts “impose health costs on Americans generally, but disproportionately harm low-income African Americans and Latina/os who live in urban centers dominated by fast food restaurants,” argues legal scholar and food oppression expert Andrea Freeman in a 2013 report.

If it weren’t for the USDA’s excessive subsidies, would “food oppression expert” even be an occupation? A lot of this silliness could be simply stopped by either eliminating or greatly reducing the USDA’s dairy subsidies to better fit the demand of American consumers for cheap cheese.

Craig Eyermann is a Research Fellow at the Independent Institute and the creator of the Government Cost Calculator at MyGovCost.org.
Posts by Craig Eyermann | Full Biography and Publications
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