USDA Plans To Buy $50M In Milk To Reduce Surplus

Wisconsin farmers are applauding new efforts by the U.S. Department of Agriculture to address a national surplus of milk.

The agency announced Tuesday it will purchase $50 million worth of milk and distribute it through their Emergency Food Assistance Program. The purchase will be made in half gallons of skim, 1 percent, 2 percent and whole milk.

The USDA has used similar buys in the past to improve prices, typically purchasing cheese or butter.

But John Holevoet, director of government affairs for the Dairy Business Association, said this is the first time the agency has bought fluid milk through the program.

“By purchasing whole milk at least, they can take not just the milk, but also the component parts of the market all at once,” Holevoet said. “By purchasing cheese, they might still have other component parts would be out there on the market. So, maybe they’re thinking it’s a way to try to influence the market as much as possible. Get the most bang for their buck.”

Darin Von Ruden, president of the Wisconsin Farmers Union, said purchasing milk could have a more immediate impact on prices.

“It usually takes a little bit for the system to adjust to a purchase like this,” said Von Ruden, who owns a dairy farm near Westby. “Fluid milk, that’s something that’s consumed within a week to 10 days. So that process would hopefully move the price up at a more rapid pace than a cheese purchase.”

The dairy industry has struggled with low prices for almost four years and recent tariffs from major export markets like China and Mexico have squashed hopes for an improvement this year.

Holevoet said producers appreciate that the USDA is recognizing their tough economic situation, but he said government milk buys aren’t going to help farmers long term.

“I think if you ask any farmer, they’re going to tell you they would much prefer access to more markets over additional government support,” Holevoet said.