Ag Interrupted: Cheese Changes Everything
These days, we order cheese on everything, from pizzas to burgers, tacos, and chicken sandwiches. But that wasn’t always the case. This week, we’re exploring the intersection of agriculture, history, and economics to take you back to a specific date and unpack how chaotic, unsettled, and flat-out bizarre history can be.
Read this post, and then listen to the first episode of AEI.ag’s new podcast series, which focuses on the surprisingly fascinating history of cheese production and consumption trends.
Cheese Production and Consumption History
Figure 1 shows U.S. cheese production going back to 1919. Ideally, these data would be cheese consumption, but since those data aren’t available for enough years, U.S. cheese production, especially decades ago, can be used as a proxy for consumption. Any differences between annual consumption and production would be attributable to exports, imports, and changes in inventory.
Over the last 102 years, cheese production increased by an average annual rate of 3.3%. The Rule of 72 reminds us that a 3.3% growth rate would result in cheese production doubling every 21.8 years. Over the last century, cheese production has increased from 479 million pounds annually to 13.7 billion. What’s perhaps most impressive about the rise of cheese is its persistence. There aren’t many years with a setback.
The U.S. cheese story can be divided into two periods, before 1956 and after 1956. Around 1956, the U.S. cheese industry shifted into a higher gear. Between 1919 and 1956, U.S. cheese production increased at an average annual rate of 2.8%. Since 1956, the growth rate has been 3.5%.
What Happened in 1956?
On June 29, 1956, President Dwight Eisenhower signed the National Interstate and Defense Highway Act into law. While the legislation launched what we now know as the interstate system, the implication of this infrastructure bill was far-reaching. Within agriculture and specifically the dairy industry, it kicked off a change in how U.S. consumers traveled and ate.
In the first episode of the new podcast series Ag Interrupted, the AEI.ag team – Sarah Mock, Brent Gloy, and David Widmar – dive deep into the history of cheese, interstates, and the U.S. dairy industry with guest Dr. Andrew Novakovic. Whether you are in the dairy sector, a fan of cheese, or just curious about agriculture, economics, and history, we think you’ll enjoy the inaugural episode.
Wrapping It Up
Agriculture is largely dominated by slow rates of change that play out over decades or entire generations. Annual growth rates like 2.8% and 3.5% may seem essentially the same, but the compounding effects over decades create vast differences.
However, as discussed in the episode, it hasn’t been all good news for the dairy sector over the last six decades. Dr. Novakovic summarized it as a “miracle wrapped in a tragedy.” U.S. dairy production has increased, outpacing population growth and resulting in heavy consolidation and fewer dairy farms.