We are all too familiar with bailouts and the morality of whether or not they should occur, but when the industry in need of bailing out is the dairy industry – more specifically Big Cheese – do we all feel the same?
The Federal government has been asked by the National Milk Producers Federation to buy out a significant chunk of cheese which are a product of overproduction in the last two years. The Chief Executive of NMPF has asked that the federal government compensate dairy farmers for $150 million worth of excess cheese – that’s a lot of cheddar!
The amount of cheese currently being stored in the U.S., not on your grocery shelves but deep in freezers awaiting a purchase order, is at a 5-year high.
How did we get to this tragic point with so much precious cheese left to languish? It’s a story of supply and demand and how sometimes, the time it takes to produce a supply far outlives the demand.
Farmers saw a gap in the cheese market two years ago, and they invested in dairy cows to balance the shortage worldwide. But by the time they had the cheese supplies, the rest of the cheese-developing world had caught up and the desire for American-made cheese had plummeted. With all of the fancy, high quality cheese made in Europe, you can’t really blame consumers for turning up their noses at the sort of cheese we produce here.
This federal purchase of foodstuffs isn’t unusual. In fact, the federal government regularly buys up farmer’s supply so that there is never a shortage of any necessary produce – it’s a good thing if you want to always walk into your favorite grocer and be able to access all of the food you love.
The question now is what is the government going to do with all of that cheese? Can we convert to a golden cheese standard in our federal reserve? Will “government cheese” go a step up in quality? I like cheese, can I get my income tax return in Gouda?