Swiss Farmers
Confront Milk Glut After U.S. Tariffs Slash Demand for Cheese Exports
The country’s dairy farmers produced a bumper
harvest of milk, but higher U.S. duties have forced them to consider ways to cut
back, including slaughtering cows.
Swiss
dairy farmers are grappling with oversupply and falling exports after
President Trump imposed a 39% tariff on Switzerland in August,
effectively doubling the price of many Swiss cheese exports to the U.S. and
threatening one of the country’s most iconic industries.
Producers
like Boris Beuret, a Jura-region dairy farmer and president of Swissmilk, have begun slaughtering cows early
to curb milk output as the U.S. market — Switzerland’s second largest after
Europe — contracts sharply. The dairy group IP Lait has recommended
cutting milk production by 50,000 tons, equivalent to output from 25,000
cows, to stabilize prices.
The
tariffs struck just as Swiss farms were producing a bumper milk harvest
following an unusually lush spring. With fewer export orders, cheese makers
have been forced to cut production by 5%, raising prices sharply — with Gruyère
now selling for $20–$70 per pound, up from $15–$50.
Switzerland
exports about 13% of its cheese production to the U.S., including
premium Gruyère, Emmentaler, and Appenzeller. Companies such as Margot Fromages say the new duties and a weaker dollar have
raised the effective U.S. import cost above 50%, hurting sales to major
buyers like Costco and Sam’s Club.
Industry
leaders are exploring alternatives — from promoting domestic dairy consumption
to expanding trade with China, India, and Latin America. Despite the
hardship, Swiss farmers remain determined to preserve their centuries-old
traditions.
“In
Switzerland, the cow is almost a sacred animal,” Mr. Beuret
said. “We will try to do the least amount of slaughter possible.”
As
a dairy farmer, Boris Beuret tends to more than 60 cows in the gently rolling meadows
of his farm in Switzerland’s Jura region. Their milk, herbaceous and nutty from
the tender grasses they graze on, makes fine Swiss cheeses and chocolates, much
of it destined for American consumers.
But
recently, Mr. Beuret sent some of his herd to the slaughterhouse
prematurely. Nearly every other Swiss dairy farmer is thinking of whether to follow
suit.
Since
President Trump announced a punishing 39 percent tariff on Switzerland in August,
the blow has landed hard on the Swiss dairy industry, where cheese makers have cut
production to deal with an expected falloff in U.S. demand.
The
tariffs compounded an existing problem: Switzerland has too much milk — and too
many cows.
“We
need to find a solution with the United States to lower the tariffs,” Mr. Beuret said. “But if things continue, we need to consider whether
we need to start slaughtering more cows.”
Few
things are as symbolic of Switzerland as its dairy cows, with their giant copper
bells, brown and white coats and high-quality milk. No one dreamed that an abrupt
shift in U.S. trade policy could play a role in a Swiss way of life that dates back
centuries.
But
as Mr. Trump traveled through Asia last week announcing
new trade deals, the fallout of tariffs imposed this year on U.S. trading partners
has become clearer. Clothing factories have been shuttered in Africa. Auto plants
in Europe have been cutting jobs.
The
stakes have been high for Switzerland, too. Since the announcement, the pastures
behind Mr. Beuret’s farm have become an example of the consequences of a trade war.
An abundant season
Mr.
Beuret’s small dairy farm is one of 20,000 in Switzerland, producing 90 percent
of the nation’s milk. Swiss farmers could make more money on an industrial scale,
but they prefer to keep tradition alive. Farmers escort cows — around 550,000 all
told — up verdant Alpine mountains in the summer to feed, producing some of the
world’s best milk. The cows descend a few months later, often paraded with flower
crowns to the sound of yodeling.
To
ensure the farms’ survival, the Swiss dairy industry sets strict quotas for milk
production and prices.
But
an unusually rainy spring spawned an abundance of grass. Although farmers lately
have been battling higher temperatures that have dried up feed, the cows on Mr.
Beuret’s farm, and at others across Switzerland, ate so well this year that they
produced a bumper milk harvest.
That
would not have been a big problem, because the dairy industry could turn the excess
supply into milk powder or frozen butter, said Stefan Kohler, the director of IP
Lait, which represents the Swiss dairy sector. But when Mr. Trump announced high
tariffs, those calculations were thrown off track.
Cutting cheese production
The
United States is Switzerland’s biggest market after Europe, importing 13 percent
of Swiss cheese production. Half is premium Gruyère, made with Alpine milk, but
there is also Emmentaler (the cheese with holes), Tilsiter
and Appenzeller. Milk also goes into Swiss chocolate.
Anthony
Margot, a co-owner of Margot Fromages, a 139-year-old
company and one of Switzerland’s biggest cheese dealers, was shocked when he heard
the new tariff rate. The Swiss had been expecting a duty closer to the 15 percent
secured by the Europe Union. When combined with other levies and a plunge in the
U.S. dollar, the effective tariff on Switzerland tops 50 percent.
Switzerland
has zero tariffs on most imported goods, but its levies on agricultural imports
can top 100 percent, to protect its dairy industry. “Maybe from the U.S. point of
view, that’s not fair,” he said. But neither, he said, were Mr. Trump’s tariffs.
When
the new levy inflated Switzerland’s tax rate on exports to the United States, prices
soared, and the Gruyère industry urged cheese makers to cut output by 5 percent.
“The
impact was direct,” said Mr. Margot, whose company matures 10 percent of Switzerland’s
Gruyère production. Around 36,000 wheels rest in cavernous cellars before being
shipped to 40 countries, including the United States, where he exports 4,500 tons
of Gruyère. Buyers include Sam’s Club, Costco and Murray’s Cheese in New York.
Cheese
that was previously priced at $15 to $50 per pound now costs $20 to $70, he said.
Thinning the herd
With
less cheese to make, the IP Lait industry group urged action to limit price declines
that could hurt farmers. “We already had excess production due to good weather,
but Donald Trump’s decision made the glass overflow,” Mr. Kohler said.
The
organization recommended cutting annual milk production by 50,000 tons, the amount
produced by 25,000 cows, Mr. Kohler said. The fastest route, he said, would be for
cows to be slaughtered sooner than usual.
Mr.
Beuret, who is also president of Swissmilk, a producers association, has already done so. He sent three dairy
cows to the slaughterhouse prematurely to reduce milk supplies, and is deciding
whether to cull more.
He
said farmers were reluctant to reduce herd sizes quickly in case a lower tariff
was negotiated. “In Switzerland, the cow is almost a sacred animal,” he said. “If
you say you have to kill more cows, that sends shock waves.”
That
includes Swiss cattle farms that raise a breed of cows for steaks. They worry that
a sudden supply of excess meat could harm their prices.
Around
85,000 Swiss dairy cows are culled annually as they age and produce less milk. They
are replaced with younger cows, and their meat is used for hamburger and pet food.
Mr. Kohler said any further slaughter, should it happen, would be carried out slowly.
“It’s not like thousands of cows would be killed
suddenly,” he said. Farmers could choose to thin herds “more quickly than normal
in the next couple of months,” he added.
Looking for alternatives
By
far, though, the preference is to find other ways to deal with excess milk. Ideas
include making mozzarella rather than importing it from Italy, making more yogurt
or running “solidarity” ad campaigns urging the Swiss to eat more dairy. Some farmers
have suggested feeding cows a little less so they do not produce as much milk, Mr.
Kohler said.
Mr.
Trump’s tariffs have pushed the Swiss government to accelerate international trade
deals elsewhere, including Latin America, India and China, which is becoming more
open to Swiss dairy products.
“Americans
should know that the whole world is starting to organize trade without the United
States,” Mr. Kohler said.
Gruyère
makers are trying to make the most of a glum situation. With the price of gold near
record highs, and Switzerland a global hub for gold bars, the industry has started
a U.S. marketing campaign to play off the higher prices.
“We’re
saying Gruyère is the new gold of Switzerland,” said Pierre-Ivan Guyot, president
of the Gruyère Interprofessional Association.
The
hope is that American consumers will be willing to shell out for the luxury of real
Gruyère rather than copies made elsewhere. After slashing exports in August, producers
sent more Gruyère to the United States in September ahead of the Christmas season.
As
for Swiss cows, Mr. Beuret said farmers would keep working
toward a solution.
“We
will try to do the least amount of slaughter possible,” he said. “Then when we have
passed the difficult period, Switzerland can bounce back.”