USDA Bails Out Dairy Industry with $50 Million Band-Aid

The United States Department of Agriculture (USDA) paid $50 million to dairy farmers in exchange for approximately 11 million to 13 million gallons of milk, which it plans to distribute to food assistance programs such as food banks. The government invoked a Depression-era law, the Agricultural Adjustment Act Amendment, to legitimize the purchase, marking the first time in history that the USDA has paid for liquid milk. While sales of plant-based milk have tripled since 2006, global dairy consumption has declined by 22 percent, according to data released last month by Cargill (the world’s largest animal-feed supplier)—a factor that led to an all-time record surplus of 78 million gallons of milk in the US last year. To mitigate lost profits, major dairy companies have severed ties with milk suppliers, as evidenced by Dean Foods, which ended its contracts with dozens of dairy farms in May and diverted funding toward developing flax milk brand Good Karma Foods, in which it holds a majority stake. According to the USDA, it authorized the purchase “to encourage the continued domestic consumption of these products by diverting them from the normal channels of trade and commerce.” The USDA’s historic bailout illustrates how low-income communities continue to be targeted by the milk industry, despite a consumer shift toward plant-based dairy for environmental, health, and animal-welfare reasons.