Why have producers been successful with artisan cheese?
Posted on 07/07/2009 at 12:00 AM by Christa Hartsook
Blog entry written by Michael Boland, professor at Kansas State University and director of the Arthur Capper Cooperative Center.
Artisan, or farmstead, cheese production has increased significantly in the United States from 2003 to 2006, to almost 900 million pounds. On a per capita basis, consumption of those cheeses have increased five times faster than the total cheese consumption. A survey of 160 cheese makers by the University of Nebraska Food Processing Center in 2007 reported that there were no price leaders in the market and cheese makers were not worried about imported European Union (EU) Product of Denomination of Origin (PDO) cheeses. The issue of PDOs has been the subject of a great deal of research by the Agricultural Marketing Resource Center through the Center for Agricultural and Rural Development at Iowa State University and it has also been studied by Kansas State University.
Farmer-owned brands, geographical indications and PDOs are similar concepts but each has a slightly different meaning. However, I will use PDOs in my discussion below. One key issue is the ability of the producers and firms within a geographic region to legally restrict supply due to the unique inputs or processes used to create a product by geography (or terroir). As such, policymakers worry about the impacts on trade negotiations between the European Union and United States due, in some part, to the perception that EU producers fear competition from U.S. firms or that U.S. consumers are paying a higher price for EU imports that are similar to U.S. products.
Products with PDO names have inherent characteristics resulting exclusively from the terrain (air, climate, land and native species) and the producers’ know-how with regard to production practices from a specific geographical area. Research carried out at Kansas State University analyzed one particular food product category, cheese, that has been widely registered in the EU and for which we observed a U.S. value-added industry being developed with similar products. An extensive data set of European PDO cheeses was created that includes quality characteristics from the original application, country of origin, the quantity of the PDO within the country and a substitute cheese produced within the United States that has similar attributes based on the quality characteristics identified in the PDO application.
The research conducted by AgMRC at Iowa State suggests that the success of a PDO depends on its ability to effectively control supply and provide a product differentiated by local geographic factors such as weather, climate or production process (e.g., know-how). In other words, by limiting the amount of land that can be used to produce the PDO, it may be possible to increase the price paid to producers if consumers perceive value associated with it and demand increases for that product through the marketing of the attributes.
Cheese is extensively traded between the United States and EU. France, Italy and Spain are responsible for 50 percent of the total cheese exported to the United States in 2007. Exports to the United States of Parmigiano Reggiano and Grana Padano, Gorgonzola, Asiago (including Montasio, Caciocavallo and Ragusano) and Provolone constituted 18.04 percent, 2.08 percent, 21.66 percent, and 21.88 percent of the total exports, respectively, in 2005. The production of PDO cheeses was 196,101 tons, representing 18 percent of the total production of cheese in France. Comte, Cantal, Roquefort, Reblochon, Saint-Nectaire, Camembert de Normandie, Munster, Brie de Meaux, Blue D’Auvergne and Morbier are the premier PDO cheeses in France, representing 78 percent of total PDO/PGI production.
The argument used by the EU for PDOs is that it is crucial to protect consumers from misleading information due to the fact that cheeses are much altered from the original in the manufacturing process. The qualities are completely different from the originals. Therefore those cheeses should not be named under their original cheese. For example, Italian Mozzarella made from buffalo’s milk is tender, nutty and is sold fresh packed in whey. However, the American equivalent is made from pasteurized milk, is drier and is packed and preserved in plastic bags. The EU traditional cheese producers would be replaced by more efficient standardized corporations that would process these cheeses in large quantities. Thus, PDOs provides information to consumers regarding the type of farming system, production process and / or geographic region where the cheese is produced.
Variables for quantity of cheese produced, measuring age, country-of-origin and the source of the milk to produce the cheese, were used to determine their effect on the imported price of PDO cheeses from Europe. Age was obtained from the importer’s specification of the products. The cheeses are produced from raw or pasteurized cow, sheep, goat and buffalo milk made in a specific geographical area and/or from specific breed animals, such as Ossau-Iraty-Pyrenees cheese that are made exclusively from Basco-Béarnaises or Manech sheep’s milk. The milk is heated or pasteurized and then the curd formed with animal rennet (found in the digestive system of young calf, sheep or goat). The curd is used to produce, for example, Cabrales (sheep’s rennet) or with plant enzymes used to produce, for example, Queso la Serena (from the flowers of Cynara Cardunculus). The curd is obtained and acidified, salted, molded or pressed depending on the type of cheese, resulting in fresh cheese. The fresh cheese is salted (depending on the variety) and stored for ripening in a controlled chamber or natural environment, like the Roquefort cheese stored in the cellars in the Roquefort village. The ripeness time depends on the specification of the cheese. However, some cheeses are sold fresh (non-ripe cheese) or matured (ripe cheese).
Locally produced artisan or farmstead cheeses, made from the same type of milk and belonging to the same type of cheese or that were derived from specific European cheeses, were considered substitute products. The criteria used to select the substitute cheeses were type of milk, texture and style of cheeses. Substitute cheese is defined as an artisan or farmstead cheese produced locally that has similar characteristics in term of type of milk, style or manufacture process to the PDO cheese. The prices were obtained from gourmet or specialty food online stores for the last two weeks of June 2008. Prices are reflected in U.S. dollars per pound. California, Minnesota, Texas, Vermont, Virginia and Wisconsin had more than 80 percent of all U.S. licensed artisan cheese makers in 2007.
What did we learn? Most cheeses are not produced in sufficient quantities for export purposes. Our empirical results indicate that the economic magnitude of an additional unit of land for the cheese PDO results in a very small incremental increase in price. In addition, French cheeses, greater aging of the cheese and type of milk matters but it is not as important. Thus, it is not surprising that an artisan or farmstead cheese industry has developed in the United States. These cheeses have very similar characteristics to PDO cheeses produced in the EU. Trade disputes may occur over certain well recognized PDO cheeses such as Parmesan, but, in general, the main EU PDO cheeses are not likely to be affected by the U.S. artisan and farmstead cheese industries. The impact of the current economic situation has not been studied on value-added foods such as artisan or farmstead cheeses, but there is little doubt that a large value-added industry has been created through demand for such cheeses in the United States.