USDA to buy US$263M dairy products aimed at supporting butter & cheese markets

USA – The US Department of Agriculture has announced plans to purchase up to US$263 million in dairy and other agricultural commodities, with nearly US$150 million directed at butter, cheese and milk.

Agriculture Secretary Brooke Rollins said the purchases will be made under Section 32 authority and distributed through federal nutrition programmes, including food banks.

The programme allocates US$75 million to butter, US$32.5 million to cheddar and processed cheese products, US$10 million to Swiss cheese, US$20.5 million to fresh fluid milk and US$10 million to ultra-high temperature milk.

For dairy processors and cooperatives, the intervention comes amid market volatility and shifting export conditions.

Spot butter was recently quoted at around US$5,950 per metric tonne in international trade benchmarks, while whole milk powder has traded near US$3,820 per tonne, according to industry data, underscoring the sensitivity of fat and solids markets to supply swings.

Government purchases of this scale can help clear surplus product and provide a floor to Class III and Class IV milk pricing, particularly when commercial offtake softens.

Traders said butter and block cheese markets are likely to see the most immediate impact, given the concentration of funds in those categories.

Beyond dairy, the USDA will buy US$75 million in pulses, including chickpeas, black and pinto beans, lentils, and split peas; US$25 million in tree nuts, such as pecans and walnuts; and US$ 15 million in fresh pears.

Section 32 of the Agriculture Act of 1935 allows the USDA’s Agricultural Marketing Service to purchase surplus commodities to stabilise farm income and channel supplies into food assistance programmes such as the Emergency Food Assistance Program.

Market participants will now focus on tender volumes, contract awards and delivery timelines. Large-scale federal procurement can influence Chicago Mercantile Exchange price direction, cold storage levels and production planning decisions across the US dairy supply chain.

This follows the US$11 million award grant funding that the USDA announced to strengthen the domestic dairy sector.

It will focus on boosting innovation, marketing, production, and distribution for small- and mid-sized dairy businesses and producers.

USDA is directing this capital noncompetitively to the four existing DBI host organizations: California State University, Fresno; University of Tennessee; Vermont Agency of Agriculture, Food & Markets; and University of Wisconsin.

These institutions serve as regional hubs offering technical assistance, business planning support, and subaward funds designed to help dairy businesses develop and grow their product portfolios.

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