Idaho Dairymen's Association CEO Rick Naerebout said that although the surplus is in large part due to a surging milk supply that has outpaced national demand, a drop in exports caused by tariffs has fed the cheese glut.
"Cheese is one of those big export items," he said, "...Mexico is our biggest trade partner and there's a 25 percent tariff on cheese going to Mexico, so it's effectively taking opportunity out of the marketplace as long as that [retaliatory] tariff remains in place."
While Naerebout said the country has seen "positive demand in cheese consumption"—the USDA reports Americans ate 39.1 pounds of cheese per person in 2017, up about 1.5 percent from 2016—it's not enough to offset a dairy industry booming thanks to more efficient cows and, in Idaho's case, more cows in the industry.
- Lex Nelson
"It's a two-year decision to get a calf to the point that she's producing, so there's not a lot of tools in the toolbox for dairymen when it comes to slowing down production," he said. "And it's not like you can just tell her, 'Hey, milk prices are low, quit producing milk.' It just doesn't work that way."
Because changing supply is a slow and daunting prospect, Naerebout said Idaho dairy farmers are hoping for a change in demand instead.
- Lex Nelson
- Mike Reid of Paradise Springs Farm, a family dairy in Victor, with his cows.
Two recent offsetting payments from the USDA through the Market Facilitation Program, while undoubtedly welcome, haven't done much to move the needle on losses for farmers.
"The combination of the two have amounted to 12 cents per hundredweight on a year's production ... The problem is, the estimates of impacts on milk prices have the negative impacts on milk price anywhere from $1 to $1.50 per hundredweight," said Naerebout. "So the USDA kicking in 12 cents per hundredweight to try to offset the negative impacts—it's really only amounting to about a 10 percent coverage of the problem that the administration has created."
Due to the ongoing partial government shutdown, the USDA hasn't updated its reports on the national dairy situation since Dec. 12.