The federal government's plan to buy $50 million in U.S. milk and give it to food banks is welcome news for struggling dairy farmers, but it's not viewed as a long-term solution for the nation's oversupply of milk.
"Awesome for food banks, great for hungry people, and very welcomed by the dairy industry, but in the grand scheme of things it's not going to change milk prices overnight," said Lucas Sjostrom, executive director of the Minnesota Milk Producers and a dairy farmer near Brooten.
Sjostrom said the milk bought under the program will represent what's produced by about 5,000 cows over a year — about 0.3 percent of U.S. milk production.
The U.S. Department of Agriculture announced this week that it will buy half-gallons of whole, 2 percent and 1 percent milk "with the purpose to encourage the continued domestic consumption of these products by diverting them from the normal channels of trade and commerce."
The milk purchases will be funded under a program established in 1935 aimed partly at increasing consumption of U.S. farm products by low-income people.
The dairy industry is struggling, and small dairy farmers are leaving the business in droves. Milk prices are about $16.30 per hundredweight, compared to $24 per hundredweight in 2014. A hundredweight is 100 pounds of milk.
The USDA's stockpile of cheese — which can be stored much longer than milk — broke another record this summer, reaching nearly 1.4 billion pounds.
But while milk prices are low, demand for other things that come out of the cows' udders — milk fat and protein — is stronger.
