Why does Switzerland – of all places – import so much cheese?

The Swiss are very proud of their cheese, and most of the cheese they eat are local varieties such as Gruyère, Emmental, and other hard cheeses from the milk of Happy Happy Cows that are famous all over the world. The Swiss also eat a lot of cheese: more than 50 pounds per person per year, compared to about 40 pounds per person in the United States.

“Cheese is part of our identity,” said Daniel Koller, director at Swissmilk, the Swiss Dairy Association. That is why one of Mr. Koller’s associates, the president of the association, caused a storm this month when he was he told a Swiss newspaper that Switzerland was on track to import more cheese than it exports this year, which he described as “economically, socially and environmentally absurd”.

Indeed, the balance of trade for Swiss cheese has been shrinking for decades, especially since the market was liberalized in 2007, allowing the country to trade with the European Union without tariffs or quotas in either direction. Switzerland now exports about 40 percent of the cheese it produces, according to industry estimates.

But in each of the first five months of this year, Switzerland imported more cheese by weight than it sold abroad, according to customs data. This is partly because the Swiss have developed a taste for foreign cheeses, with local varieties making up 64 percent of consumption last year, down from 77 percent in 2007, according to Swissmilk.

Mr. Kohler said the number of dairy farmers in Switzerland has declined in recent decades, with a decline of more than half over the past 25 years. Moreover, farming operations in Switzerland are small: the average herd size is around 27 cows, Mr. Koehler said, and dairy farms with more than 100 cows are rare.

Although the influx of foreign cheese may challenge notions of Swiss national identity, economists say there is no need to panic. Swiss producers have become more specialized in recent years, and the cheeses they export tend to be of higher value varieties, such as Gruyère. Imports are cheaper – and softer – and come largely from France. (So-called “Swiss cheese” in the US is an American clone of hard Swiss cheese, known – of course – for its distinctive holes.)

Not all cheese imported into Switzerland is consumed there either. Much of the cheese and curds brought into the country are refined in Switzerland and then exported.

“The trade difference in cheese itself is not a big thing to worry about,” said Martin Mosler, an economist at the IWP, an economic policy institute at the University of Lucerne. “We are better than most of the world at quality materials,” he said. Switzerland continues to run a healthy trade surplus in cheese in monetary terms: On average, Swiss cheese exports bring in nearly CHF10 per kilo (about $11.60), compared to about six Swiss Francs per kilogram paid for imports.

Inflation also played a role in the Swiss cheese trade. While 2021 was a record year for Swiss exports, last year saw a decline because Switzerland’s largest market, Germany, was hit hard by inflation, squeezing shoppers’ budgets. The strong Swiss franc also made cheese more expensive in Germany.

“These consumers are very price sensitive,” Mosler said.

By contrast, a strong franc has made imports cheaper, and increased imports could be beneficial for Swiss consumers, Mosler said. He said people wanted more choice for lower prices and “this is great for Switzerland itself”.

But Swiss farmers who produce cheaper cheeses could be affected by the shifting trade balance.

Milk prices have risen in Switzerland over the past few years, including the milk used in cheese, according to Robert Wenger, a professor at ETH Zurich. It wasn’t “too bad” yet, but he acknowledged that the number of farms had continued to decline in Switzerland, as it had in the rest of Europe. Wenger said this was not strongly associated with the rise in imports, but was mostly driven by other economic and social developments.

The United States has seen a similar trend, with nearly half of all dairy farmers losing ground between 1997 and 2017, in part because of diet standardization, the disappearance of many small family farms, and lower milk prices around the world, said Hannah Tremblay, director of policy and advocacy at Farm Aid, an agricultural nonprofit.

It is important to continue producing Swiss cheese for Swiss consumers, said Mr. Koller, Director of Swissmilk. One of his organization’s goals is to encourage people to buy local products that adhere to environmental and high quality standards in Switzerland.

But tastes aside, he added, the quality and standards in EU countries are often not very different from those in Switzerland. “It doesn’t make sense to close the borders for the sake of cowardice,” Mosler said.