What will happen to the surplus US cheese of 1.39 billion pounds?

The United States has accumulated its largest stock of cheese in the 100 years since regulators began to be aware of it as a result of the surge in domestic milk production and lack of interest. consumers for milk drinks. , recorded by the Ministry of Agriculture last week, represents an increase of 6% over the same period last year and a 16% increase since a previous surplus. too much milk on the hands, and the milk is more easily stored as cheese. Demand has also dropped with the closure of school cafeterias for the summer and the closure of restaurants in winter and early spring.

Some fear that stocks will increase further if trade tensions with China and Mexico reduce cheese exports. They say cheese prices have dropped, eroding the already thin margins of dairy farmers.

"Milk production continues to rise, and milk has to find a home," said Lucas Fuess, director of business information for HighGround Dairy, a consulting firm. "The problem this year is that, with so much supply, it will be difficult for many farmers to be profitable."

Cheese surpluses tend to increase each year. Cows are the most productive in the spring, when the days are longer and the foods are better. At the same time, Americans generally eat less cheese now than they do during holidays, the school year and the winter sports season.

But summer surpluses are growing more and more. Better genetics mean that cows produce more milk, and consolidation means that farms keep more cows. Unable to sell this milk in pints or gallons – which the Americans give up, even in record numbers – processors turn it into cheese, butter and milk powder.

"I expect we will continue to set these records" Newton, director of market intelligence at the American Farm Bureau Federation. "We produce more milk, it's inevitable, we have to turn milk into something storable."

But the amount of cheese stored can cause problems. Cheese prices have fallen in recent weeks, said Fuess, in response to the surplus and growth of commercial concerns.

This fall is problematic, said Mark Stephenson, director of dairy policy analysis at the University of Wisconsin in Madison. The price of cheese is an important factor in the equation that the USDA uses to establish the price that dairy farmers receive for their milk. The current price – $ 15.36 per 100 pounds – is about one dollar below average for 2017 and well below the price that many farmers say they need to break even

"When stocks are getting too big, he said. "And yes, it affects dairy farmers."

Dairy groups are not yet asking the USDA to buy the surplus – a current practice that Newton calls "quantitative cheesing". In 2016, dairy farmers asked the agency to buy more than 90 million pounds of cheese to reduce the country's "mountain" of surplus dairy products.

Michael Dykes, president of the International Dairy Foods Association, said that he is confident that Americans will eat through them. This is because the stock-use ratios, a measure of the amount of cheese taken out of storage, have remained constant even at these higher levels.

In addition to this, cheese foods remain a feature of the American diet. This record was fueled by an accumulation of non-Swiss, non-Swiss cheeses – mostly mozzarella, experts suspect – that could be penalized by strong sales of pizzas in the summer.

There is a wrinkle in his calculation. tensions. Last year, the United States exported more than 341,000 tonnes of cheese to countries like Mexico and China. If these countries turn instead to Europe for their cheese, the US stock could reach crisis levels. Already, the USDA has begun documenting these concerns among leading cheese makers.

"One day of milking a week is for the export market," said Dykes. "There is a lot of uncertainty now, I do not think we really know what's going to happen."