It is probably even harder to visualize 1,390,000 000 pounds of cheese. That's a lot of cheese.
That's enough cheese to provide about 4.6 pounds of cheese for every man, woman and child in the United States.
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| Credit: WisconsinCheeseTalk.com |
Consider for a moment that the United States currently has that amount of surplus cheese sitting on commercial warehouse shelves around the country. It is the largest surplus since the Department of Agriculture first began keeping track of this data in 1917.
Why so much cheese?
Dairy farmers are producing a lot of milk. The supply greatly exceeds demand. Milk is not easily stored compared to cheese so a lot of the excess supply is made into cheese. Last year American farmers dumped almost 100 million gallons of surplus milk as there was no market for it.
Combine all of that with the fact that cows produce more in the Spring, school cafeterias are closed and restaurants don't make as many cheese-laden dishes as they do in the winter, and you have the elements for this summer's surplus.
Underlying all of this is the remarkable increase in productivity in dairy farming by the American farmer over the years. Look at this graph that shows the increase in milk produced per cow in the United States over the last 100 years.
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| Annual Milk Production Per Cow (in lbs) Credit: USDA via The Washington Post |
All of this cheese surplus is good news for the American consumer. Expect cheese prices to decrease in the coming weeks. However, it is not helpful to those dairy farmers who have one of the toughest jobs in the world. After all, those cows never take a day off. Neither can those dairy farmers.
Those farmers need to be able to export more of their product. This is one of the reasons that President Trump has so vigorously gone after Canada's 270% tariff on dairy products. Interestingly, milk prices that Canadian farmers received last year were over 60% higher than their U.S. counterparts.
Considering the productivity of the American farmer and the increasing surplus of milk, you would think that the United States would be a larger exporter of dairy products than it is. The United States ranks well down the list of top exporters of milk. Belgium exports more milk than the United States?
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| Top Milk Exporting Countries Credit:WorldsTopExports.com |
The same is true for cheese.
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| Top Cheese Exporting Countries Credit:WorldsTopExports.com |
This is the economic rationale for free trade among nations. However, it only works if all countries are committed to the principle and combine the free trade concept with fair trade.
Donald Trump understands that too many countries have not played fairly when it comes to free and fair trade. Rather than following the theory of comparative advantage they have been taking advantage of the United States in trade practices and trade deals for years and years.
I thought it interesting that during the recent G-7 summit, when so many of the other countries were criticizing Trump's proposed tariffs on steel and aluminum, that he countered that he was willing to sign a deal that would eliminate all tariffs and trade barriers.
The shocked silence by all at the G-7 tells you all you need to know about who is really interested in free and fair trade.
If you need a reminder, here are the trade imbalances with our major trading partners around the world. Are we supposed to believe that all of these countries have this large of a comparative advantage on the United States when looked at across a range of products?
By the way, the trade deficit with those G-7 countries (UK, Germany, France, Italy, Canada, Japan) that are so concerned about the tariffs on steel and aluminum---$194 billion!
Keep all of this in mind to better understand what President Trump is doing. And despite what you hear from the talking heads on tv, I believe he knows exactly what he is doing.
In the meantime, what should you be doing to help our dairy farmers?
My advice on this 4th of July week is to enjoy a large ice cream cone. We all have to do our part. No job too small. No sacrifice too great.
Excellent article. Out here north of Seattle and up by the Canadian border there is a town called Bellingham. Bellingham is a rather small community, but they have a Costco there. In a former life I was up there all the time working and on occasion I’d need to go to Costco for office supplies etc.
ReplyDeleteThe parking lot of that Costco has more “Canadian” license plates than WA state plates for obvious reason since everything in Canada is expensive. But, the number one item that every Canadian shopper was heading out the door with was gallons and gallons of milk.
Go figure.
Too bad most Americans don’t even understand what a trade imbalance is let alone the impact.
I’ve been doing my part and eating a lot of ice cream with fresh blueberries and raspberries lately…….
Cheers,
Gary L. Gentges