America has built up a glut of cheese so big that every person in the country would need to eat an extra 3 pounds this year to work it off. And it isn’t just cheese. The growing stacks of cheddar, which can be kept frozen for years, and other cheeses such as feta, which can be stored for only a couple of months, are just the tip of a surplus of U.S. agricultural products that is swamping markets for grains, meat and milk. Supplies of cheese, meat and poultry started building as farmers decided to expand their herds and flocks two years ago when prices were high and export markets were hot. Abundant stockpiles of grain made it less risky by pushing down feed costs. But the steady climb in the dollar has deterred major foreign buyers, causing supplies to back up in the U.S. just as production is surging to records. That is sending prices for many goods to their lowest levels in years. America’s dairy farmers are expected to produce 212.4 billion pounds of milk this year, the most in history. Much of it is being sold to cheesemakers who are socking away their output, waiting for demand and prices to rise. Commercial cold-storage freezers held a record-breaking 1.19 billion pounds of cheese at the end of March, the latest month for which data is available, up 11% from the same time last year.
China is doubling down on efforts to keep unprofitable factories producing, adding to the global glut of commodities. An analysis of China’s public companies shows Beijing has provided billions of dollars in direct cash assistance, cheap power and other help that has kept steel, aluminum, diesel fuel and other industrial materials flooding onto world markets, the WSJreports. The overproduction by what critics call “zombie” companies has driven down prices and crippled competitors, leading to thousands of lost jobs in the U.S. and elsewhere. It’s also triggered a sharp rise in protectionist sentiment in Europe, Australia and the U.S. China’s steel production has had a particularly strong impact on world markets. Steel exports jumped around 20% last year, driving down prices and hitting steel plants and ship operators that haul the goods.
A change in trade rules is making it cheaper and easier for American consumers to buy overseas goods online, heartening merchants abroad but threatening stiffer competition for U.S. retailers. Since about a month ago, the government has allowed Americans to import up to $800 at a time of most foreign goods without having to pay import duties or tax. That’s quadruple the previous exemption of $200. The change, part of a bill signed into law earlier this year to overhaul the U.S. Customs and Border Protection agency, is good news for online shoppers and package-delivery companies but presents another challenge to traditional retailers struggling to cope with e-commerce.