Donated milk powder to provide boost for US dairy

By Caroline Scott-Thomas

- Last updated on GMT

Related tags: Milk

US Secretary of Agriculture Tom Vilsack has announced that over 200m pounds of milk powder will be transferred to federal nutrition programs in an effort to stock food banks while benefiting stricken dairy farmers.

US non-fat dry milk exports have shrunk by more than 50 percent over the past year on the back of lower global demand resulting from the Chinese melamine scandal and worldwide recession, according to international dairy research organization the Babcock Institute.

Secretary Vilsack said: “President Obama understands that providing food to those in need will help many weather these tough economic times. At the same time, USDA’s disposal plan will benefit dairy farmers, who have seen markets disappear and prices plummet in recent months, by increasing consumption of milk and other dairy products.”

The non-fat milk powder from the USDA’s Commodity Credit Corporation will be converted into products such as shelf-stable fluid milk, cheese and soup for distribution through the Food and Nutrition Service.

Dairy oversupply

The USDA said that it expects the milk powder to start moving through the supply chain this spring, continuing to the end of 2009.

A report from the Babcock Institute released last month concluded that larger cuts would have to be made in the milk supply in order to rebalance supply and demand and provide farmers with profitable prices. The problem has been exacerbated recently by large quantities of dairy products coming on to a contracting world market.

The USDA hopes that its milk powder donation to nutrition programs will help ease oversupply issues.

Food bank concerns

The US food bank network, Feeding America, said it has seen a thirty percent increase in demand at food banks in recent months and claims that 90 percent are now unable to meet the needs of their communities without reducing the amount of food available or making other cutbacks.

President and CEO of Feeding America Vicki Escarra said: “We do not anticipate that the trends we are seeing will reverse any time soon. We will continue to find additional ways through our public-private partnerships to ensure that we can meet the needs of the more than 25 million Americans who rely on us for food assistance each year.”

Related topics: Markets, Fresh Milk

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