How Government Cheese Became Welfare For Farmers - YouTube

Government cheese.

You probably won't find it

in anyone's fridge today, but you might still

catch glimpses of it in pop culture.

It made its way into iconic standup sets and SNL sketches.

You're gonna end up eating a steady diet of government cheese.

It's become a signifier of urban poverty for artists from New York,

..."cause I'm street like powdered milk and government cheese."

..."after that government cheese, we eatin' steak."

Philadelphia,

..."or like toast in the oven with government cheese bubblin."

and Compton.

..."what else is a thug to do when you eatin' cheese from the government"

But the epicenter of government cheese actually

rested in Kansas City, Missouri. The modest city

stored 4 billion dollars worth of government

cheese in caves and shipped millions of pounds of

it all across the country.

When I was a kid and we used to get it, it would

come in these big brick-type blocks and it's like

Day-Glo orange. You can't mistake it.

In the mid 80s, at the height of the government

cheese phenomenon, there were roughly 1.2 billion

pounds of surplus cheese in the U.S.

That's a lot of cheese. But we actually have more

today than we did in 1984. But I'm getting ahead

of myself. The story of government cheese can be

traced back to the same roots as food assistance

programs like SNAP today. Not in humanitarianism

but in agriculture. In the case of government

cheese, it all boiled down to milk prices.

People talked about food assistance programs as if

they were created to help poor people out. And

you know yes that's true. But almost all of the

major food assistance programs were ideas that

came from agriculture because we had too much of something.

So what happened to government cheese, and could

it make a comeback? To understand how we got to

the point where Martha Stewart and Snoop Dogg are talking about it...

Where do you buy government cheese?

You don't buy it. You've got to be on their special mailing list.

Let's go back to the very start of American cheese

in the 1850s. In 1851, Jesse Williams opened the

first American cheese factory in Rome, New York.

In 1903, James L. Kraft moved from Canada to the

U.S. and began selling cheese out of a wagon in

Chicago. A few years later, he formed Kraft and

brothers. And in 1916 he filed his first patent

for the process to create what we now know as American cheese.

I have discovered that cheese of the cheddar genus

may be prevented from disintegrating under the action of heat.

And that cheese used up a lot of milk.

Cue the dairy farmers.

Rural America represented over half of the population and farmers represented over half of rural America.

So there was a real sense that if you were helping out farmers you were helping out just a whole lot of citizens.

The Great Depression rocked the milk market, and the government stepped in to help control prices.

The USDA used a pricing index called the "Parity Price Formula."

Basically, if the price of milk dipped below what it cost to produce it, the government would help cover the difference.

And that provided farmers with a peace of mind that their business wouldn't tank because of something

like an economic depression or a war. In 1949, Congress passed the Agricultural Act establishing

a formal price support system for farmers. And it's not just for cheese.

The government tries to keep a stable supply of agricultural commodities like wheat, corn and dairy.

One way to do that is by buying up extra product.

That depression era logic really just kind of continued up until about the 1980s.

There was always some event that that occurred that made you glad you had this program in place.

By the end of the 70s, milk prices were all out of whack. In 1977, President Carter's administration enacted

a new subsidy that injected $2 billion into the dairy market over the next four years.

Suddenly it was very profitable to produce milk. So farmers produced a lot of it.

So much milk there was nowhere to store it all before it spoiled.

It was turned into butter, powdered milk and cheese, and the government bought it up. Tons of it, literally.

The government had so much excess dairy they didn't know what to do with it.

A lot of times when people talked about this, they talked about the government buying dairy products

as if some guy was going down to the local Kroger's and picking up a cart full.

But in fact what they did is they simply put out an announcement,

'We will buy these products at these prices. Anybody interested? Let us know.'

In December 1981, President Reagan, who earlier that year had pledged to scale back the food stamp program,

caved and said the U.S. would distribute 30 million pounds of extra cheese to those in need.

With nonfat dry milk, you can send that overseas and there's almost an unlimited potential to feed hungry people if you open it up to the world.

Cheese has almost no feasible option to go overseas and so you had to do it domestically.

Cheese is typically stored in bulk in 45 pound boxes or 500 pound barrels.

But giving out whiskey barrel sized cheese just isn't practical.

So manufacturers started processing it in smaller portions.

And from the warehouses of Kansas City and other stockpiles across the country,

boxes upon boxes of processed cheese were packaged up into five pound blocks, shipped across America and government cheese was born.

By 1984, the U.S. was storing roughly 5 pounds of cheese for every American.

It got to the point where agencies would be going to senior citizen centers with baskets of

two pound loaves of processed cheese and just handing them out.

The Temporary Emergency Food Assistance Program sent the cheese to food pantries,

school lunch programs and other organizations that could distribute the bricks of yellowy-orange dairy substance.

It has a distinctive taste which people have described as like kind of a cheddar, cheese whiz type of thing.

And it seems like people either loved it or hated it. Yeah there is no middle ground.

Something that started out with economic intentions had social and political consequences.

It was a staple of your childhood. So there is a nostalgia about that, similar to how a lot of people would feel

about, you know, breakfast cereal or peanut butter and jelly.

But at the same time it's yet another aspect of life as a poor person that you had no control over.

So you got it whether you wanted it or not and you had no choice if you liked it or not.

This block of surplus dairy product became a neatly packaged symbol of economic status sitting

in refrigerators across America.

By the 90s, it wasn't profitable for dairy farmers to pump out so much milk, and government cheese essentially disappeared.

You might still catch a reference to it on menus like Wahlburgers'.

But today's American cheese probably isn't coming from Uncle Sam.

Dairy farmers are struggling with low prices again,

but not because of an economic depression.

Genetics, technology and big farms have made milk production more efficient than ever before.

And consumer preferences are changing. Liquid milk consumption is down, but cheese consumption is on the rise.

And we have a lot of cheese.

But Americans don't have the same desire for processed American cheese like they did in the 80s.

Now it's all about specialty artisan cheeses, which can turn a higher profit but they aren't as easy to make en masse.

So here we are.

Dairy prices on edge, millions of Americans living with food insecurity,

more than a billion pounds of extra cheese.

Could government cheese be the answer?

The government actually did buy up 11 million pounds of surplus cheese back in 2016,

and distributed it through welfare programs.

Since 2016, the USDA has spent more than $47 million buying up 22 million pounds of U.S. surplus cheese.

There's also a culture of dependency argument of

farmers getting too used to having the government step in and make surpluses go away.

At some point you start asking the question:

Are farmers making milk just so they can sell it to some government program?

Another place you may see that extra dairy pop up: school lunches.

The Trump administration has been scaling back some nutrition regulations in school cafeterias.

And that's good news for the dairy industry.

40% of milk consumption in the U.S. comes from kids two to 17-years-old.

And with a higher sodium limit, school kitchens can incorporate more cheese into their plates.

And there's certainly plenty to go around.

This notion of,

'We're really good at making stuff and sometimes we make a little bit more than we know what to do with,'

goes hand in hand with, 'Oh there's some people that really could use some help.'

So, you know, you can argue that's a win win.

But the people who are really concerned about food assistance say,

well maybe these guys don't want cheese.