The Big Cheese Lie: No, The U.S. Isn?t Sitting On 1.4B Pound Surplus

ACROSS AMERICA ? Swatting down the story that the government is sitting on an enormous vault of cheese isn?t a full-time job for Cornell University agricultural economist Christopher Wolf. It just feels that way sometimes.

?I swear to you, it drives me insane, because I?ve had multiple conversations [with reporters] about it,? Wolf told Patch as he unraveled what turned out to be a big cheese lie.

It?s a sweet enough story, and at one time, it was true that the U.S. government snapped up cheese at a ridiculously low cost tied to early 20th-century price levels and kept it in secret caves under Kansas City, Missouri, and other places in middle America.

Wolf, who hails from the No. 2 dairy-producing state of Wisconsin, has been in them. He was an impressionable high school student at the time, and his Future Farmers of America chapter took a bus tour through the cheese cave under Kansas City in the 1980s.

It?s also true that a January USDA report shows 1.4 billion pounds of cheese in cold storage. But the government doesn?t own it. It?s the property of companies like Kraft, Hilmar, Sopra and others that sell a lot of cheese, Wolf explained.

The cheese is on ice, so to speak, because Americans love cheese and will quickly gobble it up. As a nation, we consume about 13.5 billion pounds of cheese a year, or about 40 pounds per person, Wolf said, citing government research.

That?s nowhere near the amount of cheese consumed per capita in France and Italy, where ?it?s just off the charts, twice as much,? Wolf said. ?But we consume a lot more than we used to,? he continued, explaining that while 1.4 billion pounds of cheese sounds like a mountain, it?s only a fraction of what U.S. consumers eat every year.

?No One Would Eat It?

The underground cheese vault myth evolved as grains of truth and pieces of history were conflated in stories that wondered what the government was going to do with all that cheese. There was enough truth in the various threads of the story that it caught on, and that?s how Wolf found himself smacking down the big cheese lie.

The 1980s era of ?government cheese? ? a product so universally reviled that it had a pop culture moment ? is one of the historical facts woven into the story that makes it so persistent and hard to shake. The government had stockpiled hundreds of millions of pounds of cheese in subterranean storage facilities like the sprawling cave Wolf visited as a high schooler.

Everybody who was of age back then remembers the processed cheese product provided to people who received food stamps and other welfare benefits, older Americans living on Social Security checks, and schools, food banks and churches.

?We had government cheese in every school lunch, and none of us ate it,? Wolf recalled from his youth. ?Somebody would have to slice that every day, knowing nobody would eat it.?

Government Cheese Origin Story

But how did the government come to be sitting on such a huge chunk of cheese that it had to give it away?

It started with the Agricultural Act of 1949, which gave the Depression Era Commodity Credit Corp., or CCC, the authority to buy dairy products like cheese from farmers to help stabilize prices.

When the price support program worked as designed, the amount of manufactured milk products the government purchased and stored remained relatively low until an unprecedented shortage of dairy products in the 1970s.

Milk prices shot up 30 percent in late 1973. The government tried to intervene by relaxing import quotas and dropping the price of milk. When President Jimmy Carter took office in 1977, he delivered on a key campaign promise to increase dairy prices, pouring $2 billion into the dairy industry in just four years in the form of increased price supports approved in the Food and Agriculture Act of 1977.

The legislation triggered support price increases every year. Farmers kept producing more milk, and the government kept buying it. USDA purchases increased from about $247 million in 1979 to $2.7 billion in 1983.

?It?s Moldy, It?s Deteriorating?

In large part because of the automatic support price increases, the policy to prop up the dairy industry was something of a train wreck. It cost the government about $1 million a day in interest and storage costs.

After President Ronald Reagan took office in 1981, the amount of cheese in subterranean storage was so great ? 560 million pounds of cheese ? the Ag Department was thinking of dumping the cheese in the ocean. Reagan?s ag secretary, John R. Block, showed up at a White House meeting with dairy farmers with a five-pound hunk of rotting cheese and said:

?We?ve got 60 million of these that the government owns. It?s moldy, it?s deteriorating ? we can?t find a market for it, we can?t sell it, and we?re looking to give some of it away.?

The Ag Department jettisoned about 30 million pounds of the cheese into the school lunch and welfare programs in the Temporary Emergency Food Assistance Program that promised to ?give poor Americans a slice of the cheese surplus.?

?At a time when American families are under increasing pressure, their Government cannot sit by and watch millions of pounds of food turn into waste,? Reagan said in a written statement at the time.

And that?s how government cheese showed up on Wolf?s lunch tray ? and later in comedy sketches, anthems about equality, and even on a cooking show with Martha Stewart and Snoop Dogg.

?Somebody would slice that, and no one would eat it,? Wolf reiterated his earlier thumbs-down review of government cheese, adding with a laugh full of mischief:

?Sometimes we?d throw it at each other.?

U.S. Still Had A Lot Of Cheese

The 30 million pounds of cheese given to the poor and served in school lunches shaved very little off the ever-growing government cheese stash. During Reagan?s first year in office, Congress froze the support price and eliminated the automatic semi-annual adjustments. Even then, the support price was twice as high as the market price.

Dairy farmers kept producing cheese under an open offer from the government to buy it. The glut of cheese grew to about 1.2 billion pounds ? about five pounds of cheese for every American ? by 1984. The cheese was not only unpopular, it underlined the inequity of hard times.

?It was crazy,? Wolf recalled.

By the 1990s, dairy prices had stabilized and the government got out of the cheese business. In 2014, Congress repealed the dairy price support program.

The government tiptoed back into the cheese business in 2019 when the Trump administration said it was using the CCC program again to provide large subsidies to offset the effects of its trade war with China, Canada and the European Union. And in 2020 at the start of the coronavirus pandemic, the government bought dairy products for the Farmers to Families Food Box Program.

In the latter, program the USDA said it would buy up to $3 billion in surplus produce, dairy and meat products that would be packaged into family-sized boxes distributed through food banks.

The big difference between those government purchases of cheese and the policies of four decades ago is the cheese wasn?t stockpiled, but distributed on the market or through food assistance programs.

?It?s fair to say they made fairly big purchases, enough that it raised the price of cheese, but it wouldn?t have been 1.4 billion pounds of cheese,? Wolf said, adding, however, that ?these kinds of ad hoc programs the government rides in on when they want to save the day distort markets.

?That matters,? he said. ?We had really high prices of cheese in July and August, primarily driven by that program.?

The U.S. government does own some cheese, but a minimal amount for rations for military troops, Wolf said.