Dairy’s Dark Secrets Fueled by Handouts & Bailouts

The first human to consume milk from a cow most likely did so out of sheer desperation. They were probably starving and saw the calf survive by suckling at his mother’s teat. They thought perhaps that could save me, too. And it worked. They survived. They most likely had a tummy ache and plenty of diarrhea, but they didn’t die.

Did cow’s milk make humans sick in other ways? Sure. Before pasteurization, bacteria and microbes are rampant in milk. In the 1800s, milk caused tuberculosis, Q fever, diphtheria, streptococcal infections, typhoid fever, and other food-borne illnesses. Plenty of outbreaks were linked to milk before someone invented pasteurization in 1864. In addition, a large percentage of the population can’t even digest milk and dairy products without becoming ill.

Why do we still rely so heavily on the dairy industry when there are so many better options available now? Perhaps our federal government has a few answers.

Big Dairy’s Government Bailouts & Handouts

The dairy industry has relied heavily on government bailouts for nearly a hundred years. After World War I, dairies were hit hard by a surplus of milk. Dairy farmers staged strikes and unionized throughout the 1930s, demanding fair milk prices. In response, the government began to create federal programs to drive dairy demand artificially. Unfortunately, taxpayer dollars are still given as handouts to the dairy industry today.

The 1940s saw the introduction of the first federal milk program for schools and federally funded milk advertising. President Truman passed the National School Lunch Act in 1946, requiring milk to be a part of every school lunch. The parents were not buying it, so they gave the message to the kids. Milk is still the requirement for students in low-income families who participate in the National School Lunch Program.

In the 1970s, the government bought excess milk outright. It was homogenized into “government cheese” and kept in over 150 underground storage units across 35 states to save the soon to spoil milk. Homogenization of the milk costs over $2 billion federal dollars for the process and then costs millions more to store and ship the cheese over the years. With more than 560 million pounds of cheese stockpiled in warehouses and more to come, President Reagan’s Agriculture and Food Act of 1981 introduced blocks of government cheese into the welfare and food stamp programs. Today’s cheese stockpile is estimated to be around 1.4 billion pounds.

“People talk about food assistance programs as if they were created to help poor people out,” said Andrew Novakovic, professor of agricultural economics at Cornell University. “Yes that’s true, but almost all of the major food assistance programs were ideas that came from agriculture because we had too much of something.” (CNBC)

US Government Subsidies for The Dairy Industry

The US federal government has eight different subsidy programs to support the dairy industry. Many of these are taxpayer-funded. “These programs attempt to control milk and feed prices, reimburse farmers for excess milk donation to nonprofit organizations, purchase excess milk, and establish insurance policies to artificially bolster the industry.” Forty-two percent of dairy revenue came from government support in 2018.

In 2020, the USDA purchased 120 million dollars worth of excess milk. After that, The Coronavirus Food Assistance Program provided 2.9 billion dollars more in direct payments to dairy farmers. The 2022 bailout was more than double the funds received by any other agricultural product.

In 2026, The U.S. Department of Agriculture announced it was awarding more than $11 million in grant funding to support dairy businesses and producers through the Dairy Business Innovation Initiatives (DBI) grant program.

And let’s not forget that these are not loans. Farmers will never repay this handout. This money goes straight from the taxpayer to the dairy industry, whether said taxpayer agrees or not. Any vegan knows, we spend a good deal of time and energy avoiding dairy products for the good of the animals. For vegans, using our tax dollars to counteract the interest we fight for is insulting.

The Dairy Checkoff Program (aka the National Dairy Promotion & Research Board)

The Dairy Checkoff Program’s sole goal is to use taxpayer money to promote the sale of dairy products. Also known as the National Dairy Promotion & Research Board, the Dairy Checkoff Program uses marketing, research, and nutrition education to promote sales. This program has led to many partnerships with chain restaurants to encourage more dairy products to their menus. Some resulting products have been Pizza Hut’s stuffed crust pizza, Taco Bell’s Quesalupa and Quesarito, and Domino’s forty percent more cheese pizza. The Dairy Checkoff program is also responsible for national ad campaigns such as “Got Milk?” built by Chocolate Milk, backed by industry-funded scientific studies.

US Dietary Guidelines on Plant-Based Milks

Approximately thirty-six percent of the general American population are lactose intolerant. So, a third of the country gets sick or exhibits stomach issues when they consume dairy products. Why do the US dietary guidelines still recommend that all Americans consume at least three servings of dairy daily? Nutritional guidelines are revised every five years, but dairy remains a large part of the recommendations.

Thankfully, 2020 saw the addition of soy milk as a nutritionally equivalent alternative to the 2020-2025 guidelines. Adding dairy alternatives is a significant, historic step, but more work is needed to remove dairy from government guidelines. In 2026, the “Whole Milk for Healthy Kids Act of 2025” was passed, which states that schools “may offer students options which may include flavored and unflavored organic or nonorganic whole, reduced-fat, low-fat, and fat-free fluid milk and lactose-free fluid milk, and nondairy beverages that are nutritionally equivalent to fluid milk and meet the nutritional standards established by the Secretary.”

Unfortunately the bill’s main goal is to get more animal-based dairy into schools. “USDA continues to work to advance the U.S. dairy industry, following the monumental signing of the Whole Milk for Healthy Kids Act of 2025, encouraging Americans to Drink Whole Milk, and eat Real Food on the heels of issuing updated Dietary Guidelines for Americans, 2025–2030”

“A large coalition of partners including Friends of the Earth U.S., the Physicians Committee for Responsible Medicine, and other members of the Plant Powered School Meals Coalition are behind this win. The group has worked together for years to advocate for this policy through the Plant Powered School Meals Pilot Act (formerly the Healthy Future Students and Earth Act) led by Representative Nydia Velázquez. This act would establish a program that provides healthy, culturally inclusive, sustainable plant-based meals for public school students, in addition to expanded access to non-dairy milk in public schools.” – Friends of the Earth

Consumers Picking up the Tab for the Dairy Industry

So does it all come down to money? Maybe so. Government subsidies artificially drive demand by keeping prices low. Lower prices lead to more consumption simply because the product is more affordable. People don’t always buy milk because it’s what they want. Consumers buy dairy products because marketing campaigns have convinced them that it is a nutritional necessity and cheaper than most milk alternatives.

It would be nice if the government would funnel more of those subsidy funds into dairy alternatives, but that is not currently as profitable, so it doesn’t seem imminent. In a more equitable world, each industry would stand or fall on its own without the government’s bailout safety net, or each industry would share in its fair percentage of the government subsidies.

** This post was updated from a previous post that was originally published in 2022.