By Lorrie Baumann
A new study highlights the cost for American cheesemakers and the entire dairy industry if European rules restricting the use of the “feta” and “parmesan” names were to be enforced in the United States as well. The only real good news in the report is that although small and medium-sized firms would be significantly pressured by lower cheese prices, they might be able to survive by marketing their niche and specialty cheeses. The report was funded by the Consortium for Common Food Names, a dairy industry group.
According to Informa Economics IEG, a market research firm specializing in the agriculture industry, the adoption of rules prohibiting American companies from using the “feta” and “parmesan” names would diminish demand for American-made cheeses now sold under those names, and the negative impacts could also affect American-made cheeses labeled Asiago, Gorgonzola, Romano, Havarti, Neufchatel, Fontina and Muenster. Eventually, those restrictions could also affect Brie, Mozzarella, Ricotta, Camembert, Gouda, Raclette, Edam, Provolone, Burrata, Emmentaler and even Cheddar cheeses.
Under European Union regulations, only cheesemakers in the specific geographic area in which certain cheeses originated are allowed to use names that have been ruled as geographic indicators. At present, there are 250 cheeses that have been granted such protection in the EU or are in the process of acquiring it. If U.S. cheese manufacturers were forced to adhere to these regulations, they’d likely be required to suspend use of names that have commonly been used in the U.S. for decades. The report suggests that the only U.S. cheeses that we can assume will never be affected by such restrictions are those sold as blue cheese, Monterey Jack, Baby Jack, Brick, Swiss, Colby, Baby Swiss and processed cheeses like Velveeta or Kraft Singles.
If these restrictions were to be imposed in the U.S. the immediate impact might be to reduce consumption of U.S.-produced cheeses by 578 million pounds, or 5 percent of total U.S. cheese consumption in 2015. At current market prices, that would be worth about $2.3 billion. Delayed impacts would be even greater, with consumption of U.S.-produced cheeses possibly falling by a projected 1.71 billion pounds.
Those drops in demand for American cheeses would have a significant effect on the U.S. dairy industry as a whole, with the possible effect that milk prices to the dairy farmers could fall by significantly over a 10-year period. That would put some dairy farmers out of business and reduce the size of the nation’s dairy cow herd. “The lower dairy prices do boost domestic consumption of other dairy products, and it does increase exports, but not nearly enough to offset the drop in cheese consumption,” according to the report.
Overall, the consumer reaction if the only mozzarella cheese they could find in their supermarket was imported from Italy and their cheddar could only come from Britain would trigger a sharp contraction in the U.S. dairy industry. The report predicts that dairy farm revenue could fall by 5.5 percent to 12.7 percent over three years, leading to revenue losses of $5.8 billion to $13.2 billion.