1967. 1/ The witness for the Department of Agriculture testified at the hearing that with respect to "other" cheeses "The Department is not seeking the exclusion or any avoidable restriction on the high quality table cheeses. It is the cheap, processing-use cheeses and processed cheeses that must be brought under control.

"2/

1/ Statement submitted on behalf of the importers of Norwegian cheese and the Norwegian Chamber of Commerce, appendix C. 2/ Transcript of hearing, p. 28.

Swiss or Emmenthaler Cheese with Eye Formation

Swiss cheese with eye formation is a hard, natural cheese made from cows milk; it is distinguished by the large holes, or eyes, which are developed by the action of certain bacteria. 1/ Swiss cheese was first made in the valley of the Alpine Emme River and hence, is

called Emmenthal or Emmenthaler.

Substitutes for cheese containing

or processed from Swiss or Emmenthaler, although included with that cheese to avoid circumvention of any restrictions, are not known to have been imported. 2/ So-called "grinders" Swiss cheese is natural cheese that has developed imperfections, generally in the eye formation, while being produced. 3/ Grinders Swiss is lower priced than either the domestic or imported cheese sold at retail as natural Swiss cheese. It is not marketed as natural cheese for table use, but rather is processed 4 and sold at the retail level as pasteurized process Swiss cheese or used as an ingredient in cheese foods or cheese spreads.

In recent years a large part of the domestic Swiss cheese has been made by a patented process in the form of 80-100 pound rectangular blocks which are sealed in plastic and often called "rindless

When

1/ Imported Swiss cheese without eye formation, i.e., process Swiss cheese, is dutiable in the tariff provisions for "other" cheese. Swiss cheese and natural Gruyere are processed together, however, the resulting product, if containing sufficient quantities of natural Gruyere (about 25 percent) is classified in the tariff provision for Gruyere-process cheese.

2/ If imported they would be included with "other" cheese, covered in a previous section of this report.

3/ Statement submitted on behalf of the Embassy of Switzerland, p. 3, and statement submitted on behalf of the United States Austrian Chamber of Commerce, p. 3.

4/Transcript of hearing, p. 31.

Swiss cheese in the form of blocks is better suited to con

ventional chainstore marketing than that in wheels, the traditional form; the wheels are difficult to slice because of their heavy rind and hard to cut into uniform sizes because of their shape. Rindless Swiss is produced only in the United States.

U.S. customs treatment

The rate of duty currently applicable to imports of Swiss or Emmenthaler cheese from countries other than those designated as being under Communist control, is as follows:

TSUS
item

Commodity

117.60 (pt.) Swiss or Emmenthaler cheese with eye formation.

Rate of duty

14% ad val.

This rate of duty, which became effective January 1, 1968, is the first stage of a concession granted by the United States in the sixth (Kennedy) round of trade negotiations under the General Agreement on Tariffs and Trade. The rate of duty will be further reduced in 4 annual stages to 8 percent ad valorem.

Presidential Proclamation No. 3870, dated September 24, 1968, imposed an emergency quota on imports of Swiss or Emmenthaler cheese with eye formation if shipped otherwise than in pursuance to a purchase, or if having a purchase price (as provided in the proclamation) of less than 47 cents per pound. The following tabulation

chows the quota and the allocation for the remainder of 1968 and

Ennually thereafter:

U.S. consumption

:

:

-:

--:

:

--: 1,281,000 :

:

972,000 609,000

1,843,000

367,000

200,000 124,000

156,000

4,271,000

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.

The emergency quota will remain effective pending the findings and recommendations of the Tariff Commission and action thereon by the President.

U.S. consumption of Swiss cheese increased annually from 129 million pounds in 1963 to 148 million in 1967 (table 22). The increase is attributable largely to the popularity of cheese sandwiches and to promotional efforts of producers and distributors both of the domestic and imported cheese.

U.S. producers, production, and stocks

In 1967, 115 domestic plants produced Swiss cheese, compared with 133 plants in 1963. The principal producing States were Illinois, Wisconsin, Ohio, and Pennsylvania.

In volume of output, Swiss cheese ranks fourth among all kinds of cheese (excluding cottage cheese) produced in the United States. In recent years it has accounted for about 7 percent of aggregate U.S. output of cheese. In 1963-66 the annual U.S. output of Swiss cheese increased from 120 million to 137 million pounds; in 1967, it declined to 132 million pounds (table 22). The decline in production reflects in part a decline of about 5 cents per pound in the average price paid in 1967 for Grade C 1/ blocks of Swiss cheese at Wisconsin assembly points. In 1968, however, the price increased; during January-August 1968 it was about 5 cents per pound above the average in the corresponding period of 1967.

Yearend stocks of Swiss cheese have generally been small compared with domestic production. In the period 1963-67 they ranged from 7 million to 12 million pounds annually. A large part of the stocks consists of cheese that is being aged.

U.S. exports and imports

Any U.S. exports of Swiss cheese are small; data are not

separately reported.

1/ The grades established by the U.S. Department of Agriculture for Swiss cheese are U.S. Grades A, B, C, and D (7 C.F.R. 58); they are determined on the basis of flavor, body, eyes, and texture, finish and appearance, salt and color.