Cheese wedges
October 11, 2016

Dairy Farmers Would Lose Billions if Generic Cheese Names Restricted

Top Story  |   |  By: Jim Dickrell

A report by Informa Economics IEG released today suggests U.S. dairy farmers could lose $59 billion over 10 years if the use of generic cheese names, known as Geographical Indications (GIs), is restricted by trade agreements. The full impact of such an agreement would be a decline in milk prices of up to $1.77/cwt.

The Transatlantic Trade and Investment Partnership (TTIP) negotiation between the U.S. and European Union (EU) is currently on tenuous ground for a variety of reasons. But inclusion of GI restrictions would have a devastating impact on U.S. dairy farmer income.

Such restrictions are already likely having an impact in agreements the EU has made with South Korea and Canada, says Jim Mulhern, president and CEO of the National Milk Producers Federation.

Common cheese names such as parmesan, gorgonzola, asiago and feta are being targeted by EU trade negotiators, and even more common names such as mozzarella and provolone could eventually be at risk.

“The damage Europe’s GI agenda could do to the U.S. dairy industry is severe,” says Mulhern. “By 2025, our dairy farmers would lose up to 15 percent of their income and the U.S. dairy herd would shrink by up to 9 percent, or 850,000 cows. Thousands of dairy farmers would be forced out of business.”

Adds Connie Tipton, president and CEO of the International Dairy Foods Association: “Under Europe’s GI policies, U.S. manufacturers would face a choice of abandoning markets for cheeses like feta and parmesan or selling them under names like ‘crumbly white cheese’ or ‘hard grated cheese. It’s not hard to imagine the problems those name changes would create and this report finally quantifies those impacts.”

Such an agreement between the United States and the EU could reduce U.S. cheese consumption up to 21%, representing $5.2 billion in lost cheese sales. The U.S. economy could lose 175,000 jobs.

“To avoid such severe consequences, the United States must aggressively oppose the carving up of markets and refuse to bestow monopolies on a few privileged European suppliers,” says Jaime Castaneda, executive director of the Consortium for Common Food Names (CCFN). “The use of common names by the U.S. dairy industry—and indeed all other sectors relying on typical food terms—should be aggressively preserved, both for domestic and international use.”

Castaneda says U.S. dairy groups will also be talking to U.S. government officials about potentially bringing a World Trade Organization trade suit against the EU for its agreements with South Korea and Canada.

Read a summary of the Informa Economics IEG study here.