The year was 1981, and President Ronald Reagan had a cheese problem. Specifically, the federal government had 560 million pounds of cheese, most of it stored in vast subterranean storage facilities. Decades of propping up the dairy industry—by buying up surplus milk and turning it into processed commodity cheese—had backfired, hard.
The Washington Post reported that the interest and storage costs for all that dairy was costing around $1 million a day. “We’ve looked and looked at ways to deal with this, but the distribution problems are incredible,” a USDA official was quoted as saying. “Probably the cheapest and most practical thing would be to dump it in the ocean.”
Instead, they decided to jettison 30 million pounds of it into welfare programs and school lunches through the Temporary Emergency Food Assistance Program. “At a time when American families are under increasing financial pressure, their Government cannot sit by and watch millions of pounds of food turn into waste,” Reagan said in a written statement. The New York Times declared that the bill would “give poor Americans a slice of the cheese surplus.”
But the surplus was growing so fast that 30 million pounds barely made a dent. By 1984, the U.S. storage facilities contained 1.2 billion pounds, or roughly five pounds of cheese for every American. “Government cheese,” as the orange blocks of commodity cheese came to be called, wasn’t exactly popular with all of its recipients.
As strange as this predicament might seem, the U.S. is far from the only country to artificially stabilize agricultural prices by stockpiling food products. China props up pork prices by buying surplus for its frozen pork reserve. When maple syrup supplies run low, Canada taps into its strategic reserve. And the European Union has a long, scandalous history of accumulating “butter mountains,” “wine lakes,” and “milk lakes”—the latter of which consisted of vast quantities of skim milk powder housed in warehouses in Germany, Belgium, and France.
So how in the world did the U.S. end up with a mountain of slowly molding cheese?