If you read the dairy trade press over the last fortnight you could come away with two entirely opposite impressions of the cheese business. One says the sector is buried — commodity blocks piling up in cold storage, fluid milk prices that have been punishing for three years running, farms leaving the business every month. The other says demand for good cheese has never been better and the constraint is supply.
Both are accurate. They are just describing different industries that happen to share a word.
The numbers our members recognize
A survey of the US artisan and specialty sector published last month is the clearest picture anyone has had in a while, and the shape of it will be familiar to most of you. The sector has passed a thousand makers. Roughly three-quarters of them produce 50,000 pounds a year or less. Specialty cheese is the single largest category in specialty food, comfortably past four billion dollars at retail.
And then the part that stops the room: around one in five makers did not operate profitably in the most recent year surveyed, and more than nine in ten named maintaining profitability as an active concern. Not "a risk to monitor" — a concern, now.
Read those two halves together and you get the actual condition of the sector: growing, admired, increasingly written about, and thin. Thin margins, thin staffing, thin room for a bad batch or a cold room that fails in February. A maker turning out 30,000 pounds a year with a waiting list is not the same animal as a plant with a surplus problem, and policy written for one rarely fits the other.
The surplus does still reach you, though, and it reaches you through the case. When commodity cheddar is discounted hard, some share of shoppers who would have picked up a wedge of your washed-rind buy the cheaper block instead and feel fine about it. Members on the retail side have been telling us for months that they are holding specialty margin by holding their nerve on price and doing more talking at the counter, not less. That is a strategy, but it is a strategy that runs on staff hours.
A tariff line opened last Friday
The other development worth your attention this week happened on 1 February, when the Europe–Japan economic partnership entered into force. For cheese specifically it is a genuine change rather than a rounding error: duties on hard cheeses that had sat near 30% begin a phased walk down to zero, and a substantial tariff-rate quota opens for fresh, soft, processed and blue-veined styles.
If you are a European member with any export ambition at all, this is the most interesting thing to happen to your addressable market in years, and the paperwork is the hard part rather than the demand. If you are a member outside Europe selling into the same Japanese accounts, you have just watched a competitor's landed cost fall while yours stayed put. Several of you have already written to us about exactly that, and it is now firmly on the agenda for the federation's trade work this year.
We are not going to pretend a trade agreement is a level playing field for a farmstead operation making eight styles by hand. Export readiness is a real threshold: documentation, labeling, cold-chain evidence, a buyer who will hold a slot. What we can do is lower the cost of finding out whether you are close to it. Members thinking about a first export conversation should look at Export Documentation Essentials in the course catalog, and the Standards Committee is a sensible first stop on labeling questions before you commit to artwork.
What we're doing about it
Three things, briefly. The Membership & Outreach Committee is pulling together a picture of where our small-producer members actually sit on profitability, because a sector-level average is not much use when you are the one deciding whether to add a second make day. The Education Committee is reviewing whether Pricing & Margin for Specialty Cheese is pitched at the right size of business — early feedback says it assumes a slightly larger operation than most of you run. And we will keep saying, in every room that will have us, that "dairy" and "specialty cheese" are not interchangeable words when rules and support programs get written.
If your own numbers for last year look nothing like the survey's, we would genuinely like to hear it. Both directions.
The International Cheese Federation (ICF) and More Cheese are entirely fictional. This post is demonstration content created for MemberJunction. All people, organizations, events, courses, certifications, figures, and quotations in it are invented, and nothing here represents a real association, a real business, a real person, or real professional advice.