1/ Imports for 1968 are limited to the amounts shown above plus the quantities entered on or before Sept. 24, 1968; however, the quotas are not applicable to quantities exported to the United States, but not entered prior to Sept. 24, 1968, to the extent that such quantities are in excess of the quotas.

These emergency quotas will remain effective pending the report and recommendations of the Tariff Commission and action thereon by the

President.

U.S. consumption

In the period 1964-67, apparent U.S. consumption of the cheese herein considered increased from 1,228 million to 1,324 million pounds (table 18). The increase in consumption of this cheese is associated primarily with the increased demand for cottage cheese and soft Italiantype cheeses and reflects a variety of factors, including rising

consumer incomes, the popularity of pizza, improvements in the quality of the products, promotional efforts of both domestic producers and

importers, and increasing acceptance of specialty cheese varieties. U.S. production

U.S. production of the miscellaneous cheese

increased from 1,223

million pounds in 1964 to 1,304 million pounds in 1967. U.S. output,

by type, is shown in the following tabulation (in thousands of pounds):

Includes creamed and partially creamed cottage cheese.

In recent years, cottage cheese has accounted for nearly 70 percent of the total output of all cheeses shown above. Soft Italian-type cheese accounted for more than half of the increase in annual output between 1964 and 1967. The U.S. processors of Danish block cheese and Danish full skim cheese report that domestic sources are not interested in producing either of these products. 1/

The plants that produce cottage cheese are located throughout the United States, particularly in heavily populated areas; those that produce the other cheese herein considered are located mostly in the North Central States. Many plants that produce various

Statement submitted on behalf of the Fischer Cheese Company, pp. 5 and 6.

manufactured dairy products make cottage cheese in order to utilize

nonfat dry milk and skimmed milk, which are byproducts of the produc

tion of butter.

Plants that produce the other types of cheese often

specialize in the production of one or two varieties.

U.S. exports

In the period 1964-67, aggregate annual U.S. exports of the cheese considered here ranged from 2.7 million to 3.5 million pounds-equivalent to less than 1 percent of the annual production of such cheese during that period. The bulk of the exports consisted of process cheese. Canada, one of the principal markets for U.S. exports of this cheese for many years, took about three-fifths of the exports in 1967. Japan, Panama, the Bahamas, Venezuela, and the Philippine Republic also took considerable quantities.

U.S. imports

Aggregate annual U.S. imports of the cheese discussed here, which had been increasing gradually for many years, rose from 8 million pounds in 1964 to 18 million pounds in 1966 and to 23 million pounds in 1967. In the period January-September 1968, they amounted to 31 million pounds compared with 18 million pounds in the comparable period of 1967 (table 19). In 1967 imports were equivalent to about 2 percent of domestic consumption. Although imports of the cheese valued over 25 cents per pound (table 20) still represent about half of the combined amount, they have increased less in the last several years than those of the lower-priced cheese (table 21).

As indicated earlier, imports of certain of the "other" cheese. were made the subject of temporary quotas under section 22 by Proclamation No. 3870 issued on an emergency basis September 24, 1968. In this proclamation the President declared that the representative period on which the quotas on these cheeses were based was the calendar year 1967, the year in which imports reached their highest level (23 million pounds). The application of the quota to cheeses for which the purchase price is under 47 cents per pound was apparently based upon the view advanced by the spokesman for the Department of Agriculture at the hearing, that processed cheeses and cheeses for processing--i.e., the cheeses which are said to be materially interfering with the pricesupport programs for milk and butterfat--are so priced for export to the United States and that the natural cheeses for table use--i.e., cheeses which do not so interfere--are priced for export to the United States at 47 cents or higher per pound. On the basis of the best, but clearly inadequate, data available with respect to the value of imported cheeses, it would appear that the aggregate quota quantity of 17.5 million pounds proclaimed is equal to the quantity imported in 1967 for which the purchase price was under 47 cents per pound. No data are available from which to correlate the end use of imported cheeses

with their purchase price.

U.S. imports of the other cheese considered here come from a score
Denmark has supplied about 40 percent of the total in

of countries.

recent years.

A large part of the imports from that country consists

of Danish low-fat block cheese and Danish full skim cheese. Imports of

this cheese first entered on an experimental basis in 1965. 1/ In 1966 they amounted to about 3 million pounds, in 1967 to about

5 million pounds, and in the period January-June 1968 to about 4 million pounds. 2/ In 1967 they accounted for about half of the cheese entered from Denmark under the "other" cheese provisions and in the period January-June 1968 they accounted for about 60 percent. A sample of entry papers for the first 4 months of 1968 indicates that most of the Danish cheese imported, other than the low-fat block cheese and full skim cheese, is Harvarti, Camembert and Brie, and Munster. 3/ The average unit value of Danish cheese was some 40 to 50 cents per pound; that for the entries shown as Danish block cheese was about 18 cents per pound. The Danish block cheese is low in butterfat content. 4/

In recent years France, the second largest supplier of "other" cheese to the United States, has furnished from 12 to 19 percent of the total imports. A sample of entry papers of cheese from France in the first 4 months of 1968 indicates that the bulk of the identified cheese consisted of Camembert and Brie, Gourmandise, Beaumont, and Boursin cheese. The unit value of this cheese was generally 40 to 80 cents per pound; some was more than $1.00 per pound. In August or September 1968 about 4 million pounds of so-called imitation cream cheese were imported from France. This cheese, which had not

Statement submitted on behalf of the Fischer Cheese Company, p. 2.
Ibid., p. 3.

3/ About one-third of the entries represented cheese that was identified only by the designation "other cheese."

Statement submitted on behalf of the Fischer Cheese Company, p. 1.