Surplus U.S. food supplies dry up

WASHINGTON -- As the farm economy collapsed in the 1980s, the U.S. Department of Agriculture was saddled with mountains of surplus cheese, corn and other foods that it socked away in warehouses and even caves.

As recently as 2003, the USDA had to buy so much powdered milk to support dairy prices that beleaguered officials shipped some to U.S. ranchers for cattle feed.

While the previous surpluses were costly and sharply criticized, much of the food found its way to the poor, here and abroad. Today, says USDA Undersecretary Mark Keenum, "Our cupboard is bare."

U.S. government food surpluses have evaporated because, with record high prices, farmers are selling their crops on the open market, not handing them over to the government through traditional price-support programs that make up for deficiencies in market price.

Worldwide, food prices have risen 45% in the past nine months, posing a crisis for millions, says the United Nations' Food and Agriculture Organization.

Because of the current economics of food, and changes in federal farm subsidy programs designed to make farmers rely more on the markets, large U.S. reserves may be gone for a long time.

The upshot: USDA has almost no extra food to supplement the billions in cash payments it spends to combat hunger at home and in developing nations.

A coalition of religious and farm groups, in an open letter to Congress this week, warned that low supplies increase the risk of hunger and higher prices, calling for creation of a strategic grain reserve.

"As a matter or national security, our government should recognize and act on its responsibility to provide a stable market for food in an era of unprecedented risk," says the letter from the National Family Farm Coalition and various groups.

Others experts say large government stockpiles are not only unnecessary, they are counterproductive. That includes John Block who, as President Reagan's Agriculture secretary during the 1980s, went to enormous lengths to get rid of extra food: giving commodities to farmers as payment for idling land, offering surplus grain as a subsidy to exporters and holding cheese giveaways for the poor.

"We shouldn't have large reserves stacked up. It was very costly for us," Block said, noting that for years he was accused by other nations of depressing their farm sectors by dumping extra U.S. food on world markets.

Still, even he terms the current world situation "shocking" in the sense that prices for so many types of food have risen at once.

The USDA's sole remaining sizable stockpile contains about 24 million bushels of wheat in a special government trust dedicated to international humanitarian aid. The special food program, which also holds $117 million in cash, has dwindled from its original 147-million-bushel level as Republican and Democratic administrations have used it but not fully replenished it.