How the Government Stockpiled a Billion Pounds of Cheese

Deep underground, somewhere near Springfield Missouri, the U.S. government operates a little-known subterranean facility. If you can gain access to these limestone caves, you won’t find nuclear warheads or a crashed alien spaceship. Instead, you’ll find an immense amount of cheese. Almost one and a half billion pounds of it, to be exact — or about four and a quarter pounds of cheese for every man, woman, and child in the nation.

Did you know that you, the American taxpayer, are the proud owner of four pounds of government cheese? And do you know why we have bought so much cheese — an amount roughly the size of the U.S. Capitol — with our hard-earned tax dollars?

The answer lies in America’s absurd agricultural policies, and it shows that the American “free market economy” is anything but.

The U.S. government first became a major purchaser of dairy products during the Second World War, when it snapped up huge quantities of butter and cheese for soldiers. After the war, the government decided to keep its hand in the dairy market, using the Agricultural Act of 1949 to establish the Milk Price Support Program. This program enabled the government to buy up any dairy products that could be preserved for a long time — cheese, butter, milk powder — at a designated price. This was supposed to enable farmers to produce milk without worrying about whether they could end up selling it; at worst, they could always sell it to a processor that could turn it into cheese which the government would buy at this minimum price.

The government slowly got out of the dairy business in the late 1960s and early 1970s but jumped back in after a dairy shortage in the 1970s caused milk prices to jump 30% in 1973. At first, regulators responded by loosening import restrictions on milk, which caused things to move too far the other way — all of that cheap foreign milk caused the price of milk to drop so low that it was driving dairy farmers out of business.

In response, Congress passed the Food and Agriculture Act of 1977, which required the government to once again support dairy prices by buying excess dairy products in the form of cheese — billions of dollars worth by the 1980s. The law raised the price for cheese every six months, causing taxpayers to buy more and more of it. At the height of the program, in 1983, the government bought $2.7 billion worth of cheese!

The Reagan Administration — which had been rightly derided for its dismissive attitude toward the poor — decided to kill two birds with one stone. They would get rid of all of this “government cheese” — much of which was in the form of salty, heavily processed orange blocks — by giving it to needy Americans. Who would be able to accuse Ronald Reagan of being dismissive of the poor, if he was doling out hundreds of millions of pounds of (often moldy) cheese to them? Actually, pretty much everybody, but they gave the cheese out anyway.

This “solved” the cheese surplus problem for a while, but in recent years the government has once again become the owner of quite a lot of cheese. Americans drink far less milk than we once did — from 275 pounds per person in the 1970s to less than 150 today — likely because of increased awareness of the environmental costs of cattle farming and the emergence of dairy alternatives. But the government keeps buying up the excess dairy production; now, about 42% of the dairy industry’s revenue comes from the government in some way.

Rather than simply accept that there should be less dairy farming in America, the Department of Agriculture works hard to convince Americans that they really want to drink milk. The government makes sure that most schoolchildren receive milk as the default beverage with their lunches, even though many of the children are lactose intolerant. Remember the “Got Milk” ads that were ubiquitous in America between the 1990s and 2014? Those were your tax dollars, working to convince you to purchase something that people didn’t want as much anymore.

The ads must not have worked very well, because the government has once again become the reluctant owner of over a billion pounds of cheese, sequestered under Springfield, Missouri.