USDA is helping create an additional outlet for milk, cheese and butter by purchasing millions of dollars’ worth of dairy products for food banks and federal nutrition programs.
In a recent announcement, U.S. Secretary of Agriculture Brooke Rollins shared USDA’s plans to purchase up to $263 million in agricultural products through the department’s Section 32 authority under the Agriculture Act of 1935. Of that total, nearly $148 million is earmarked specifically for dairy products, including butter, cheese and milk.
“These staples are essential for feeding families and sustaining America’s agricultural economy,” Rollins says, emphasizing the purchases are designed to deliver real food to Americans while injecting dollars back into rural communities.
The move by USDA closely aligns with a formal request made by the National Milk Producers Federation (NMPF) late last year.
“These are almost exactly the numbers that we sent [in] a request to the Secretary on Nov. 25,” says Gregg Doud, president and CEO of NMPF, during an interview with “AgriTalk” host, Chip Flory. “We ran our analysis, suggested what we thought aligned with USDA’s historical dairy Section 32 purchases, and USDA agreed and announced it this morning.”
What’s Included for Dairy
According to USDA, the planned dairy purchases will include:
- Butter: $75 million
- Cheddar cheese and cheese products: $32.5 million
- Swiss cheese: $10 million
- Fresh fluid milk: $20.5 million
- Ultra-high temperature (UHT) milk: $10 million
For dairy farmers, the purchases could help absorb product during periods of tight margins and volatile milk prices.
“Dairy farmers have shared in the struggles faced throughout the agricultural economy, and these purchases will provide important relief to producers who will benefit from the additional demand, helping them provide nutritious dairy products to Americans and the world,” Doud says.
He notes NMPF has been particularly focused on the butter market, where supply and demand have been misaligned.
“We were especially looking at the butter market,” he says. “Right now, we’re looking for any demand under any rock we can find in the dairy business.”
Rollins emphasized the purchases are designed to support not only dairy farmers, but also the broader network of jobs tied to dairy production.
“These Section 32 purchases help stabilize farm income while supporting rural jobs tied to dairy processing, transportation and manufacturing,” Rollins says. “By turning farm production into meals, we’re supporting the farmers who feed America.”
Market Impact: Helpful, But Not A Game-Changer
While these new purchases made by USDA will help provide support, Phil Plourd, head of market intelligence for Ever.Ag, notes the impact on prices could be modest in scale.
“This is one of the ways that low prices can work to cure low prices,” Plourd says. “Without the details — especially on timing — it’s difficult to offer much specific commentary on potential price impact. At first blush, the commitment to buy butter seems substantial. Based on recent solicitations and purchases, we’d guess that the $32.5 million for cheddar cheese and cheese products might buy about 18 million pounds. That’s not nothing, but if our math is accurate, it’s only about 5% of one month’s worth of U.S. output and less than 1% of annual production. But, the bottom line is straightforward: $148 million in additional dairy purchases counts as supportive.”
Doud echoes that view, noting while the purchases won’t transform markets overnight, they do provide meaningful support — especially for butter and cheese.
“148 million isn’t anything that’s going to be a huge market mover, but it certainly helps, especially on the butter side of the equation,” he says.
Ben Laine, senior dairy analyst at Terrain, adds that even though the purchase won’t dramatically shift markets, it should be positive news for prices.
“The purchase announcement should be favorable for milk prices,” Laine says. “We’re starting the year in an oversupplied situation, and most of the positivity in dairy markets so far has been around nonfat dry milk and whey. Support for butter and cheese in particular through these purchases should help round things out and provide more strength to milk prices.”
In the global dairy sector, Doud says signals from the international dairy market are starting to improve, offering more support for prices.
“The good news is we’re seeing these markets — dairy markets, butter markets and cheese markets in Europe — begin to turn around here a little bit,” Doud says. “The world market’s starting to turn, and every little bit helps in this kind of environment.”
That comes against the backdrop of robust U.S. dairy exports.
“The year-end trade numbers came out today, and U.S. dairy exports were tied for an all-time record at $9.5 billion,” Doud notes. “U.S. dairy is the third-biggest ag exporter, behind corn and soybeans. We had a really good year in exports. We did really, really well in 2025 on cheese exports, an all-time record by a country mile.”
That strong export base, combined with USDA’s planned purchases, contributes to a steadier overall demand picture, with international buyers drawing product abroad and federal programs taking in additional volumes domestically.
How Section 32 Works
USDA’s Agricultural Marketing Service (AMS) purchases domestic agricultural products when market conditions call for extra support. The products are then distributed through nutrition programs run by USDA’s Food and Nutrition Service (FNS), including food banks participating in The Emergency Food Assistance Program (TEFAP).
For dairy processors, these purchases often mean larger orders for products like butter and cheese, which can indirectly help support farm-level milk demand. Historically, Section 32 has acted as a pressure valve for farmers during periods of oversupply or weak commercial demand, moving dairy out of commercial markets and into programs that feed families while keeping milk flowing off farms.
Broader Ag impact
In addition to dairy, USDA plans to purchase fruits, legumes and tree nuts, including:
- Chickpeas: $12 million
- Dried Beans (Black and Pinto): $25 million
- Fresh Pears: $15 million
- Lentils: $14 million
- Pecans: $10 million
- Split Peas: $24 million
- Walnuts: $15 million
USDA says the combination of products helps strengthen the nation’s food safety net while reinforcing agriculture’s role in economic resilience.
With this action, the Trump administration says it is aiming to bolster American agriculture, support rural communities and ensure families in need have access to nutritious, domestically produced food.
