Swiss dairy sector out of balance due to Trump

Swiss dairy farmers have already had a difficult year without Trump, as, like in many other European countries, Swiss milk production this year is considerably higher than usual. The import tariffs Trump imposed on Switzerland on July 31st exacerbated the problem. While only a limited volume of all Swiss cheese goes to the United States—15% according to the Swiss—this export had been very lucrative up until then, as Americans paid well for Gruyère, Emmental, and other premium Swiss cheeses.

Moreover, these exports also ensured that the Swiss valuation model remained neatly balanced. The Swiss dairy farming and dairy industry, through a unique milk price model and allocation of milk flows, carefully coordinate to ensure that the production system remains balanced and that farmers continue to receive high milk prices. 

Balance disturbed
Now that balance is gone, and everything is going haywire. In the short term, 25.000 of the well over half a million Swiss cows are at risk of being slaughtered, and in the long term, perhaps as many as 85.000. Milk prices are also plummeting, sometimes to as little as 30 cents, a price considered very low even in the western lowlands. 

emergency fund
To restore some balance, the Interprofession Lait has established an emergency fund with a provisional 16 million francs (over €17 million). This fund will support the export of 2000 tons of butter, 2000 tons of cream, as well as chocolate and other dairy-rich products. Products are also being temporarily stored/frozen, awaiting better times.

The package runs until June of next year. What happens after that remains to be seen. Particularly painful for Swiss Gruyère cheese producers is that French Gruyère, made in Franche-Comté, is not affected by Trump's import tariffs.