Vermont’s dairy producers are losing markets and face rising distribution costs for products sent to China — and within the United States.

The announcement of Trump administration tariffs on some $300 billion in Chinese-made products could further hurt an already struggling dairy and cheesemaking industry.

U.S. farm products that are shipped out — such as the whey and whey protein left over from making cheese — brought in over $5 billion globally in 2018, according to the 2018 Census.

As of this year, since a first round of tariffs were introduced, creameries in New England have experienced more than $4 million in losses, according to Doug DiMento, director of corporate communications for AgriMark, which oversees Cabot Creamery’s corporate body.

While Cabot doesn’t export cheese, the whey and whey proteins left over from making curds often are shipped to China to feed livestock and create whey-based products.

“That’s what you see in protein drinks and frozen foods,” DiMento said. “That’s been a big market for us until the tariffs came into play.”

Even if those canceled markets were re-established tomorrow, DiMento said other countries and companies — some of which are part of the European Union — already have taken them up.

“We’re scrambling to find markets for our whey products,” DiMento said. “Markets are poor, prices are low. ... We’ve been exporting whey and whey permeate for over 20 years.”

Cabot is owned by a cooperative of farmers, and all 850 members are feeling the pinch. Aged cheddar remains Cabot’s major market, but more cheeses would mean more whey and a broader market.

“In the past, the whey markets have added millions of dollars to the co-op’s bottom line,” DiMento said. “It’s a drain on the bottom line now ... The secondary markets are now becoming primary markets: EU, Indonesia, Ukraine, those are the types of markets we’re trying to develop long-term relationships with.”

“It doesn’t carry the premium it used to,” DiMento said. “This is the fifth year in a row of low milk prices ... We’re trying to remain as efficient as possible. ... Everyone has the opportunity to increase their prices, except the farmer. ... The USDA controls his prices.”

International markets are only a part of the problem: The tariffs on international goods stand to effect U.S. producers shipping inside the country, as well.

Amy Sisti-Baum, Atlantic Coast sales representative for Grafton Village Cheese based in Brattleboro, said the rising costs of imports will deter many companies from buying cheese, and when they do, orders and shipments now may be in short supply.

“We generally send large shipments down to New York and New Jersey, where it gets distributed to refrigerated warehouses,” Sisti-Baum said. “Then they go out on trucks for redistribution in states like California, to cheese shops, hotels, (and other establishments).”

But Grafton often shares space in specialized distribution trucks that operate on a budget based on technology, fuel, employment and other costs, Sisti-Baum said, and the rising cost of moving cheeses internationally may result in less demand.

That could mean more space on those trucks, driving up distribution costs that would be passed on to retailer regardless. In the end, that could make it difficult to move Vermont cheeses, according to Carlos Yescas, president of the Oldways Cheese Coalition.

“It’s not just a one-sided thing, for sure,” Sisti-Baum said. “If the majority of the cheese that would be filling those pallets aren’t there, the trucks still have to go. ... This can delay shipments, make them more expensive to ship, and we need to max out those trucks to benefit price per gallon.”

“A lot of people are very fired up on the subject,” she said.

Sisti-Baum said the fourth quarter of the year provides for around 50% of sales for the cheese industry with holidays, parties, food gifts, and generally larger appetites. That is when the next round of tariffs could go into effect.

“We will be a part of the ripple effect. There are some cheesemakers who think it will increase sales of American cheese, but it’s short-sighted to think that. It’s going to give cheese a bad name. A lot of cheese shops have to order in advance, so this will really hurt the little cheese shops and little distributors,” she said.

katelyn.barcellos @rutlandherald.com

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