The United States, it turns out, has a huge cheese surplus. It’s become a matter of jokes on late night television and clowning around on Twitter, but it’s actually a serious policy issue, especially for farmers, and we should be engaging with that. When the US left looks at food policy, it often doesn’t focus on the right things, and food surpluses are an example of a huge problem that’s not getting enough attention, or is being talked about in the wrong ways.
Here’s what happened: In 2014, a softer dollar made for high export demand, and there was a lot of call for cheese. Cheesemakers in turn needed a lot of milk. Like, a lot. The price of milk increased, and in response, farmers started building out their facilities and growing their herds, a process that takes years — and culminated right in time for exports to shrink because the dollar is stronger. Exports aren’t the only factor here, but they’re a big part of it.
Cheesemakers are stuck with huge amounts of cheese that they need to either sell at a loss, or put in storage. Larger companies can afford storage or changes on their production lines to pump out cheeses with the best possible profit margin (cheddars are getting very popular right now). Smaller companies cannot.
The people who really suffer, though, are the dairy farmers. They have cows and they have to keep milking them. Milk eventually goes bad, which means that they have to take the choice of selling it or throwing it away, and selling it at least yields some return. So dairies are taking a huge loss while dealing at the same time with things like having to make financing payments on all the facilities improvements they made when the market was looking stronger.
As people joke around about the cheese surplus, consumer prices are falling — good for low-income people who want an accessible source of protein — but the costs for farms are increasing. Eventually, farms are going to have to start selling stock and closing, unless the market picks up. Ultimately, as the fortunes of the industry shift, farmers that weathered this crisis will be in a good position to take advantage, but not everyone can get through radical market pressures like this one.
Farming has always been a highly unpredictable industry, and one that comes with formidable financial risk. When the market is good, it can be very, very good, and farms can stand to make a lot of money off a year’s crop. When the market is bad, it can be devastating. And that’s assuming farmers don’t lose crops to natural disasters, pests, and other problems, or that they don’t run into the host of other issues that can bring a farm to its knees.
The left often thinks of farming as small family farms versus industrial agriculture, as nice local organic food versus vague mass produced unpleasantness, but they don’t delve deeper into food politics. Or they look at things like subsidies for dairy farmers and dismiss them as profiteering for the wealthy instead of thinking about what happens in a radical market downturn when farmers are looking at slaughtering their herds or allowing them to starve, when people are losing their farms because the price they’re getting for their milk is so low. Farming is an interconnected, complicated system filled with sometimes conflicting pressures, and cheese isn’t the only thing in dramatic surplus right now.
People joke about fixing the problem by eating more cheese — certainly more consumer demand would be a step in the right direction. Others say that the surplus should be ‘given away to the needy,’ which I’m sure sounds nice, but doesn’t really stand up to scrutiny. Some may remember the heyday of government cheese and the redistribution of a massive surplus in the 1980s that was caused by pretty much the same market factors we see going on here.
It sounds nice to talk about giving stockpiled food away, it does, and I’d rather see food given to people who need it rather than deliberately allowed to spoil. And I agree that hunger is a huge problem in the United States as well as elsewhere, and that anything we can do to address that is good. However, increasing purchasing power would be more useful than dealing with the logistics of distributing free cheese, and it would be more empowering for low-income people who might want to be able to choose what they eat, rather than relying on scraps and handouts from the government.
Collecting, processing, and redistributing the surplus would be an extremely expensive and complicated endeavor. Farms and cheesemakers would also lose out in the short term and would have to hope they could stay above water until cheese prices stabilised. In the 1980s, the government resorted to subsidising farmers to get them to stop producing cheese, an option that may be considered here if the crisis can’t be ameliorated by other means, but it still doesn’t get at the problem: Farming is a world of see-sawing supply and demand, rapidly shifting fortunes and dramatic shifts of culture. We can’t blame farmers for attempting to take advantage of emerging market trends and sometimes predicting wrongly, and we definitely shouldn’t be making fun of them when something catastrophic happens.
Image: Cheese!, Jessica Spengler, Flickr