Why is Switzerland, therefore, importing so much cheese? – 07/25/2023 – Market

The Swiss are proud of their cheese, and most of what they consume are local varieties such as Gruyère, Emmentaler and other hard cheeses from the milk of happy cows that are famous around the world. The Swiss also eat a lot of cheese: more than 22 kg per person per year, compared to around 18 kg per person in the United States.

“Cheese is part of our identity,” said Daniel Koller, director of Swissmilk, Switzerland’s dairy association. That’s why one of Koller’s colleagues, the association’s president, created a storm this month when he told a Swiss newspaper that the country was on track to import more cheese than it exports this year, which he called “absurd – economically, socially and ecologically”.

Indeed, the Swiss cheese trade balance has been shrinking for decades, especially since the market was liberalized in 2007, which allowed the country to trade with the European Union without tariffs or quotas in either direction. Switzerland now exports around 40% of the cheese it produces, according to industry estimates.

But in each of the first five months of this year, the country imported more cheese by weight than it sold abroad, according to customs data. In part, that’s because the Swiss have developed a fondness for foreign cheeses, with local varieties accounting for 64% of consumption last year, down from 77% in 2007, according to Swissmilk.

The number of dairy farmers in Switzerland has fallen in recent decades – more than halved in the last 25 years, Koller said. In addition, farming operations in Switzerland are small: the average herd size is around 27 cows, Koller said, and dairy farms with more than 100 cows are rare.

While an influx of foreign cheese could challenge notions of Swiss national identity, economists say there is no need to panic. Swiss producers have become more specialized in recent years, and the cheeses they export tend to be higher value varieties such as Gruyere. Imports are cheaper — and milder — and mostly come from France. (What is called “Swiss cheese” in the United States is an American reproduction of Swiss hard cheeses, known –of course– for their characteristic holes.)

Not all cheese imported into Switzerland is also consumed there. Much of the cheese and curd brought into the country is refined in Switzerland and then exported.

“The trade gap in cheese itself is not a big concern,” said Martin Mosler, an economist at the IWP, the Institute for Economic Policy at the University of Lucerne. “We are better than most of the world at high quality products,” he said. Switzerland continues to have a healthy trade surplus in cheese by financial value: on average, Swiss cheese exports come in at around CHF10 (£15) per kilogram, compared to around CHF6 per kilogram paid for imports.

Inflation also played an important role in the Swiss cheese trade. While 2021 was a record year for Swiss exports, last year saw a slump as Switzerland’s biggest market, Germany, was hit hard by inflation, straining buyers’ budgets. The strong Swiss franc also made cheese more expensive in Germany.

“These consumers are very price sensitive,” Mosler said.

On the other hand, the strong franc has made imports cheaper, and increased imports could be good for local consumers, Mosler said. People want more choice at lower prices and “that’s great for Switzerland itself,” he said.

But Swiss farmers who produce cheaper cheese could be affected by the shift in the trade balance.

Milk prices in Switzerland have risen in recent years, including milk used in cheese, according to Robert Finger, a professor at the university ETH Zurich. It’s still not “too bad”, but he acknowledges that the number of farms continues to fall in Switzerland, as in the rest of Europe. This is not strongly related to increased imports, Finger said, but was mainly driven by other economic and social developments.

The United States has seen a similar trend, with a loss of about half of its dairy farmers between 1997 and 2017, caused in part by food system consolidation, the disappearance of many small family farms and lower milk prices around the world, said Hannah Tremblay, policy and advocacy manager at Farm Aid, an agricultural nonprofit.

Koller, managing director of Swissmilk, said it was important to continue producing Swiss cheese for Swiss consumers. One of his organization’s goals is to encourage people to buy local products that meet Switzerland’s high environmental and quality standards.

But, tastes aside, he added, quality and standards in EU countries generally don’t differ much from those in Switzerland. “It doesn’t make sense to just close borders to cheese,” Mosler said.

Translated by Luiz Roberto M. Gonçalves