Cheese

Cheese is the largest single use of milk and the most valuable traded dairy product. World production was roughly 26 million tonnes in 2024. The European Union is by far the largest producing region at about 10.7 million tonnes, close to half the global total, led by Germany, France, Italy, and the Netherlands; the United States is the largest single country at about 6.5 million tonnes, concentrated in Wisconsin and California.

In the United States cheese is not just an end product, it is the price-setter for the milk most farmers sell. The CME spot cheese market, 40-pound Cheddar blocks and 500-pound barrels, feeds directly into the Class III milk price formula under the Federal Milk Marketing Orders. When block and barrel prices move, Class III milk moves with them, which is why cheese trading sits at the center of US dairy risk management. The CME Cheese (Cash-Settled) future settles to the monthly weighted average of those block and barrel prices.

Trade is dominated by Europe, with the US a fast-growing exporter. The five biggest exporters by value, Germany, Italy, the Netherlands, France, and the United States, generate well over half of world cheese export value, while Japan is the standout large buyer outside the EU. Consumption keeps rising structurally as incomes grow, making cheese one of the few dairy products in secular demand growth even as fluid-milk drinking declines.

Cheese is also the star of one of the great government-stockpile stories: "government cheese." Through the 1970s the US propped up milk prices by having the Commodity Credit Corporation buy surplus milk and convert it into storable cheese, butter, and nonfat dry milk. High guaranteed prices drove chronic overproduction, and by 1981 the federal cheese hoard had swollen past 500 million pounds, more than two pounds for every American, much of it aging in refrigerated limestone caves around Kansas City and Springfield, Missouri, where the rock stays naturally cool. Facing the absurdity of food rotting in storage, with the agriculture secretary holding up a mouldy five-pound block and admitting "we can't find a market for it," the Reagan administration began giving it away to the poor in late 1981, the orange-yellow blocks distributed through what became the Temporary Emergency Food Assistance Program. "Government cheese" entered the culture as a symbol of both the safety net and farm-policy folly. (A viral claim that 1.4 billion pounds of government cheese still sits in a Missouri cave is a myth: the caves are real, but today's cheese in them is overwhelmingly privately owned, not a federal mountain.) The stockpile was drawn down as price supports were cut through the 1980s and 1990s, and cheese is why dairy gets stored at all: it locks up both the fat and the protein of surplus milk in an edible, giveaway-able form, which powder cannot do.