America Has a Cheese Problem That’s Only Going to Get Worse

Americans have more cheese than ever before — and that stinks for cheesemakers.

Currently, the U.S. has 1.39 billion pounds of cheese in storage, according to the Department of Agriculture and that equates to roughly 4 pounds of cheese for every American.

Why so much? There are two main factors. Cheese is piling up due to a dwindling demand for milk, yet farmers are on target to produce a whopping 218.7 billion pounds of milk by December. On top of that, cheese, butter and milk powder store better than fluid milk, resulting in a surplus of cheddar and Swiss.

Extra cheese means lower prices, which spells trouble for farmers. The current price is at $15.36 per 100 pounds, which is a dollar below the average for 2017, according to The Washington Post.

President Donald Trump's trade war with China and Mexico isn't helping the situation.

Currently, the cheese industry is trying to step in. The more than 60 dairy associations and cheese makers — including the U.S. Dairy Export Council and the International Dairy Foods Association — wrote a letter to Trump asking him to suspend tariffs on Mexican products. Mexico consumes a quarter of foreign demand for American dairy, but that could change when a 25% tariff on fresh cheese hits on July 5th.

If the tariffs stay in place for more than six months, dairy farmers need to find new markets for cheese, and can expect milk prices to continue to fall, according to a report from agribusiness research firm Rabobank. If the trend continues in the longterm, the report notes, it could be detrimental for dairy exporters.