Going back at least almost 100 years the U.S. government has been buying commodities that were made in excess quantities and distributing them to charities and low-income groups. For instance, the U.S. Department of Agriculture (USDA) has been buying foods since at least after the Agricultural Act of 1935 was passed. Surplus dairy products were bought and used for relief programs during the Great Depression. But what caused the government to store billions of pounds of cheese back in the 1980s? Some history first.
Just like today, the 1970s and 1980s saw inflation rates spike. High food prices meant millions of poor Americans were left hungry. In particular, there was a shortage of dairy products. A low supply coupled with high demand meant higher prices than just a few years ago. By some accounts, dairy prices were 30% higher in late 1973 than just a few months before.
To reduce price levels, President Nixon removed some import quotas. These lower prices impacted farmers’ incomes, to the point that they requested government assistance in order to prevent further loss of income. The next president, Jimmy Carter, who came from generations of farmers and a farmer himself, promised higher milk prices. Also, the government was buying surplus quantities of dairy products to support farmers.
For a few years into the 1980s, farmers took advantage of this and produced as much dairy as they could. Eventually, the government held butter, cheese and dehydrated powder in 150 warehouses in 35 states. Over 500 million pounds of cheese was stored in the depots. The press and the public became aware of the immense amount of cheese, some of it moldy after being stowed away for so long. This prompted President Reagan to enact the Special Dairy Distribution Program, which released 30 million pounds of cheese to charitable organizations starting in 1981. These organizations used the cheese as part of their meal programs to feed poor Americans. By 1983, the United States had given away more than 300 million pounds of the stuff.
Although the government has withered its stock over the years, there have been more recent examples of Uncle Sam going into the cheese buying business again. In 2016, the USDA bought about 11 million pounds of cheese to distribute, to alleviate the highest surplus in 30 years, and to level prices. In 2020, the USDA purchased cheese for the National School Lunch Program and other federal food assistance programs.
Sources
https://dairymarkets.org/pubPod/pubs/EB9505.pdf
https://www.ams.usda.gov/content/usda-cheese-purchase-program-announced-0
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