What If I Told You There Is A Massive 'Cheese Glut' Across The U.S.?

The United States has built up a cheese surplus so big -- the largest in 32 years -- that every person in the country would have to eat an extra three pounds a year to get rid of it.

The glut has the price of cheese very low, and the U.S. may start seeing an increase in fashionable cheese consumption. According to the latest dairy market report published by the U.S. Department of Agriculture, cheese stockpiles are at their highest since March of 1984. This is the result of global market forces, such as rising European exports, rising American production of milk and dairy products, a strong dollar, and a weakening euro. More than half of the glut is made up of American cheese, while 2 percent is Swiss, and the rest is simply labeled "other," according to the Smithsonian.

"Phrases like 'milk oversupply' and 'substantial rises' are rife in the report, which notes that the United States has a total of 725.7 million pounds of 'natural American cheese'—real cheese, not the processed cheese product, made in the U.S.A.—and total natural cheese stocks of a whopping 1.191 billion pounds."
That is quite a lot of cheese. The number includes stacks of cheddar, which can be frozen and preserved for years, but also cheeses like feta, which has a much shorter frozen shelf life of a few months. What has caused this cheese surplus of legendary proportions?

The American cheese stockpile has grown so big because dairy exports from Europe have been increasing over the last two years, causing cheese prices to fall in response. Global milk oversupply is another factor, and a steady rise in the strength of the dollar has deterred foreign buyers. Supplies of cheese, meat, and poultry all started increasing when farmers decided to increase production at a time when prices were high and markets were lucrative. American dairy farmers are forecast to produce 212.4 billion pounds of milk this year, the largest output in history. Output of other commodities such as red meat and poultry have also risen 3.1 percent from last year to 97.6 million pounds. This has caused exports to screech to a halt at a time when production is surging to record numbers.

"Farmers have had every reason to expand because of strong global demand," Shayle Shagam, livestock analyst with the U.S. Department of Agriculture, told the Wall Street Journal. "But now we have a lot of products looking for a home in a smaller number of places."

Meanwhile, the U.S. has taken advantage of cheap European dairy prices to buy up all their cheese and dairy products as well. According to Bloomberg, EU exports of butter rose 27 percent this year, while cheese rose 17 percent.
"European dairy products are so cheap right now that the U.S. itself has become the new No. 1 customer for some products -- imports of EU butter doubled last year and rose 17 percent for cheese, according to the European Commission. All that excess supply is building up in U.S. refrigerators, especially as American dairy production heads to a record this year. "
However, even though the EU has gained in dairy sales due to the falling euro, the global oversupply of milk has sent prices tumbling, and European farmers may soon be in dire financial straits, according to Fortune.
"Dairy farmers from Germany to Ireland are facing huge losses from low prices, and the European Milk Board has called for EU policy-makers to set up an effective program that will restrain milk production in exchange for financial compensation."
Already, the price for block cheddar cheese in the U.S. fell to a five-year low of $1.27 a pound on Thursday, and raw milk prices in the EU are at their lowest since 2010.

The average American consumes 34.1 pounds of cheese every year, a figure projected to increase to 36.5 pounds by 2024. Peoples in the European Union eat an average of 37.8 pounds of cheese per individual each year.

[Photo by Tim Boyle/Getty Images]