Editorial Comment Publisher/Editor



USDA’s Dairy Product Purchases Could Use More Variety

Dick Groves
Cheese Reporter

May 29, 2020

Over the past couple of years, and for several reasons, the US Department of Agriculture has become a really, really important buyer of dairy products. Given that this probably won’t change in the near future, perhaps it’s time for USDA to diversify its dairy product purchases a little bit more.

First, let’s clarify a couple of points about USDA dairy product purchases in recent years. During fiscal year 2019, which ended Sept. 30, 2019, USDA purchased 390.1 million pounds of dairy products for a total of $499.3 million. By comparison, USDA in fiscal 2018 purchased 326.6 million pounds of dairy products for a total of $382.4 million, and in fiscal 2017 the agency bought 265.8 million pounds of dairy products for a total of $378.1 million.

Fiscal 2020 doesn’t end for another four months, but our guess is that USDA’s dairy product purchases will greatly exceed 500 million pounds and $500 million. That’s due at least in part to the fact that USDA is purchasing dairy products under an expanding number of authorities, as well as more “traditional” purchases such as for the National School Lunch Program.

So, for example, back in 2016, USDA announced plans to purchase Cheddar cheese for surplus removal under Section 32 of the Agriculture Act of 1935. Today, USDA is still buying various dairy products under Section 32.

In 2018, USDA announced plans to purchase a variety of dairy products as part of its trade mitigation efforts. Those purchases also continue to this day.

And of course, here in 2020, USDA is purchasing dairy products as part of its coronavirus relief efforts. Those purchases are being made under at least two new authorities: the Families First Coronavirus Response Act and the Coronavirus Aid, Relief, and Economic Security Act, better known as the CARES Act.

USDA is not only buying dairy products under a growing number of authorities, it is also buying a wider variety of dairy products than it was just a few years ago. Just to cite a couple of examples, USDA almost two years ago announced plans to start purchasing fluid milk products under Section 32; and USDA is also now purchasing Pepper Jack cheese.

But as USDA expands its dairy product purchases and the authorities under which it makes these purchases also expands, it seems like the agency should perhaps increase the variety of dairy products it is purchasing even more. If nothing else, this might expand the number of companies that can sell products to USDA.

The latest evidence of USDA’s somewhat narrow list of dairy product purchases came last Friday, when the agency announced plans to purchase several dairy products under Section 32. These products include Cheddar cheese in various forms, Mozzarella, process cheese, butter and instant nonfat dry milk.

As far as cheese purchases are concerned, USDA in recent months has purchased Cheddar cheese, process cheese, Mozzarella (including String), and Pepper Jack. In 2019, Cheddar, Mozzarella and Monterey Jack (which, along with Colby, make up the category of “other American-type cheese”) accounted for about 74 percent of US cheese production (for more details, please see the Dairy Production Extra supplement in our May 15th issue).

That means that USDA is not purchasing cheeses in such major categories as Cream and Neufchatel, Swiss cheese, Hispanic cheese, Muenster and Feta.

And those are just some of the categories tracked by USDA’s National Ag Statistics Service. The Wisconsin Field Office of NASS tracks the production of specialty cheese in the state and, as we reported in our May 1st issue, Wisconsin last year produced 818 million pounds of specialty cheese, including, among other things, 43.2 million pounds of Havarti, 33 million pounds of Asiago, and 101 million pounds of Feta. Havarti alone is produced by over 40 companies in a dozen states. But none of these companies will get a chance to sell Havarti, or any other specialty cheese for that matter, to USDA under current programs.

Why does USDA purchase just a limited number of cheeses? It appears, from a review of recent solicitations for products, that USDA only acquires products for which it has purchase specifications. In the cheese category, this includes natural American cheese (Cheddar), Mozzarella, Natural Pepper Jack cheese, and Pasteurized Process American Cheese.

One thing we’ve noticed since the coronavirus pandemic upended the food industry is that federal agencies are allowing a fair amount of flexibility when it comes to everything from food labeling to hours of service for truck drivers.

So why can’t USDA start buying dairy products that, while they might not have USDA purchase specifications, still have an FDA standard of identity, for example? This would include such aforementioned cheeses as Cream and Neufchatel, Swiss, Asiago and Muenster, as well as cheeses such as Gouda and Provolone.

And for at least some of the cheeses that lack a federal standard of identity, there are other standards or related references that could be used in USDA purchasing programs. These might include, for example, Codex standards, rules for various product judging competitions, or buyer specifications.

USDA is, and will remain, a major buyer of dairy products for distribution to consumers. Given the growing variety of products being produced and marketed to consumers these days, the agency should consider expanding the list of dairy products it buys, and companies it buys from.


Dick Groves

Dick Groves has been publisher/editor of Cheese Reporter since 1989. He has over 35 years experience covering the dairy industry. His weekly editorial is read and referenced throughout the world.
For more information, call 608-316-3791 dgroves@cheesereporter.com

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