The cheese market is in flux:
- Milk prices have been increasing. Feed prices went up last year, so dairy farmers raised fewer cows. Yet, the United States has more cheese in storage than any year since record-keeping commenced in 1917.
- The United Kingdom is less than a year from leaving the European Union, and there is no agreement yet between the EU and the UK. If no agreement is reached, the default is for World Trade Organization tariffs to prevail, and these are substantial.
- The UK is a substantial importer of specialty cheese from the Continent, so if prices rise due to tariffs, demand in the UK will fall, which means European producers will be looking for new markets. The U.S. is a prime target.
- Mexico is finalizing a trade agreement with the European Union, and the agreement includes a protection for European geographic indications — a term for products that correspond with a specific region, such as Champagne sparkling wine or Parmesan cheese. By using a grandfather clause in the Mexican/EU agreement, Mexico will protect U.S. cheese producers who use these names that are protected in Europe. But this is supposed to be effectuated through a revised NAFTA accord, and the U.S. cheese producers aren’t persuaded that this will actually happen.
- President Trump has attacked Canada for its dairy price supports. In response to tariffs from the U.S., both Mexico and China have put tariffs on U.S. cheese.