Americans are eating more cheese now than ever before: The country consumed around 37 pounds per capita in 2017. But it's not enough to make a dent in the U.S.' 1.4 billion-pound cheese surplus.
More than 900,000 cubic yards of cheddar, American and Swiss currently sit in cold storage across the United States, enough cheese to form a wheel the size of the U.S. Capitol building. The excess is the biggest the country has seen since the government started keeping track a century ago, and it's 16 percent larger than the cheese surplus of 2016 when the government offered to buy up $20 million worth of excess cheese.
As Andrew Novakovic, professor of agricultural economics at Cornell University, explains, the surplus is the result of a combination of factors. "Part of it is just the amount of milk being produced on farms," he tells Here & Now's Jeremy Hobson. "Part of it is changes in the domestic use of that milk."
Another factor is trade — "a self-inflicted wound," Novakovic says. And there is growing concern among experts the glut could grow larger under the Trump administration, with the White House's trade war with China and Mexico's tariffs on U.S. dairy exports. As of September, annual cheese shipments were down 63 percent to China and 10 percent to Mexico.
"That disruption has been particularly difficult for the cheese industry, and Mexicans are great consumers of cheese," Novakovic says. "Mexico is far and away our biggest customer and of course one of the few foreign customers we can serve with a truck instead of with a boat.
"If we could get ourselves back in a better trade situation, that would help quite a bit."
On Americans' evolving cheese-eating habits
"There's an up and down on the story for what we're doing in the U.S. The single largest type of cheese produced and consumed in the U.S. is mozzarella or pizza cheese, and that continues to roll right along. Sales are strong. People are still eating the kind of food that that sort of cheese goes on top of. What has changed — and changed fairly noticeably and fairly recently — is people are turning away from processed cheese, the kind of cheese that usually gets melted on a cheeseburger or other sandwich in a quick-server, fast casual-type restaurant, and they're upgrading to other types of cheese. But there's a lot of volume of that so-called processed cheese that's been lost as people are switching around.
"What has changed — and changed fairly noticeably and fairly recently — is people are turning away from processed cheese."Andrew Novakovic
"It's also the case that we're seeing increased sales of kind of more exotic, specialty, European-style cheeses. Some of those are made in the U.S. A lot of them aren't. Typically, when you're substituting an expensive cheese for an inexpensive cheese, you won't buy as much. So there's a lot of moving parts in that whole cheese thing."
On how cheese producers are adapting to consumers' changing eating habits
"The move towards the more exotic, specialty-type cheeses has been happening now for a few years, and so there's been more people expanding into that area. But as you might imagine, it's a little trickier making those cheeses, and a very large commercial firm that's set up to put out large volumes of commodity-type cheese doesn't easily get into saying, 'Well, how about we make some Camembert?' And so, that transition has been ongoing, but it's a little on the slow side."
On how to solve the U.S.' cheese surplus
"It's the same as it is for everything else: If you've got too much of something, the price has to go down until consumption rises. … We've been looking at price adjustments, low-level price adjustments for three or four years, and a lot of farmers would say, 'Well, make it stop.' But the fact of the matter is we're still pushing out a little bit more milk than we know what to do with. And really, it's not a big number, but until those two numbers get reconciled, we're going to continue to see these low prices."
On his favorite cheese
"My favorite cheese: Colby. … Actually, you want to try ... a really nice, European-style, Italian-style cheese. There's a company in Wisconsin owned by a guy by the name of Jim Sartori. It goes under the Sartori label. He's got several versions, but it's called BellaVitano. It's a variation of Parmigiano-Reggiano. I think that's probably the best cheese made in the United States. I mean, there's a lot of really great cheeses, but that one is amazing."
This segment aired on January 8, 2019.