1. This is for the Cheese article.

Cheese

America's cheese hoard continues to balloon to unprecedented levels, as producers fear the mountain could grow further and put even more dairy farmers out of business.

About 1.4 billion pounds of American, cheddar and other kinds of cheese is socked away at cold-storage warehouses across the country, the biggest stockpile since federal record-keeping began a century ago.

Driving the glut are cheese makers who ramped up production before trade tensions abroad tamped down demand for many of their products. Shifting tastes at home have further changed the outlook for traditional cheese makers. Many are paying to store their excess cheese in hopes demand and prices will improve.

"There's a whole ton of aged product laying around," said Nate Donnay, director of Dairy Market Insight at INTL FCStone Financial.

Cheese, which has a limited shelf-life, is less valuable once it spends weeks in cold-storage, and producers are concerned that the glut and price drop that has come with it could eat into profits. Spot market prices for 40-pound blocks of cheddar fell around 25% this year from 2014 prices, while 500-pound barrels typically used for processed cheese declined 28%.

Cheese exports have suffered(Links to an external site.)

since Mexico and China, major dairy buyers,instituted retaliatory tariffs(Links to an external site.)

on U.S. cheese and whey. Cheese shipments to Mexico in September were down more than 10% annually, according to the U.S. Dairy Export Council trade group, and shipments to China were down 63% annually.

That leaves U.S. dairy producers relying more on a domestic market where tastes are changing.

Americans ate a record 37 pounds of natural cheese per capita last year. But they are ditching processed, American and plain cheddar cheese for foreign varieties. Per capita consumption of mozzarella has topped cheddar since 2010. Consumption of processed cheese spreads per capita is about half what it was in 2006.

Strong pizza sales have helped rocket mozzarella into the top cheese spot, dairy analysts said. Grocers big and small are also increasingly beefing up cheese counters with imported and less typical varieties as Americans turn away from processed foods for unique products.

"I can't stand to eat processed American or pasteurized cheese product," said Gerrard Burks, a 29-year-old tutor from Detroit who said he has been trying new kinds of cheese recently.

More adventurous cheese eating poses a challenge for big U.S. cheese makers focused on traditional varieties.

Ireland-based Glanbia PLC, one of the world's biggest cheddar producers, is building a $470 million plant in Michigan that will make 300 million pounds of American-style cheese a year when it opens in 2020. The company's New Mexico plant is scheduled to undergo a $140 million expansion.

A Glanbia spokeswoman said the company expected global demand for cheese to rise over time, and that it runs some of the most efficient facilities in the world. "While cheese markets can be inherently cyclical in nature, long-term trends point towards a rise in global dairy consumption," she said.

Quebec-based Agropur Inc. this year said it would triple capacity at its South Dakota cheese plant to process 9 million pounds of milk a day into Italian and American-style cheese.

Some cheese makers say they are adjusting their operations to produce newly popular varieties.

Wisconsin-based Sargento Foods Inc. has added Gouda and Havarti varieties to its line of sliced cheeses. Schuman Cheese in New Jersey has added twists on Parmesan, Asiago, Fontina and Alpine to its product line.

They will face competition from foreign producers looking for a bigger slice of the U.S. market. Netherlands-based Royal FrieslandCampina NV acquired New Jersey-based importer Jana Foods earlier this month for an undisclosed price. The world's largest producer of Gouda and other Dutch-style cheeses said it wants to double its U.S. revenue in three years.

"The U.S. is the biggest and most challenging market in the world," Gert Jan Poort, president of FrieslandCampina's U.S. consumer division, said in an interview.

U.S. retailers are also shifting more of their cheese offerings to imported and specialty products that command higher prices than sliced cheddar and string cheese.Kroger(Links to an external site.)

Co.hasexpanded its cheese selection(Links to an external site.)

since buying New York-based Murray's Cheese shop last year.

Kroger Chief Executive Rodney McMullen said he and his wife have since started buying a wider range of cheeses, too. "We didn't know any better," he said.

Companies that built their business on American, cheddar and processed cheeseare still pumping out those varieties(Links to an external site.)

, banking on exports growing. October cheese export figures showed better business, including with key importer Mexico.

But in the short term, the supply has pushed down cheese and milk prices. That is hurting farmers that supply big cheese makers, too.

Milk prices are down(Links to an external site.)

around 40% from a 2014 peak that encouraged many farmers to expand their herds. Nowdairies are going out of business(Links to an external site.)

as prices crash. More than 600 dairy farms have closed this year in Wisconsin alone.

Stan Ryan, chief executive of the Seattle-based Darigold Inc., said falling prices have driven down profits for the affiliated Northwest Dairy Association cooperative's roughly 450 farmers.

"It is very challenging for dairy farmers to stay in the game," said Mr. Ryan, adding that more than 25 of his farmers have gone out of business in the past year.

Question:

You may want to draw this model out to help you. Please draw a demand curve with a slope of -1. Please draw a supply curve with a slope of +1.

From the article, identify what happened to supply of cheese and what happened to the demand for cheese. Draw these shifts in your supply and demand model. Please shift thedemandcurve with alarger magnitudethan the shift in thesupplycurve. After analyzing your model, what happened toquantityafter the shifts?

Group of answer choices

quantity increased

quantity decreased

quantity stayed the same