Monday, November 19, 2018
 U.S. Cheese is Increasingly Profitable to Export  

Most cheese manufacturers are operating with full or nearly full schedules, unconstrained by milk supply availability.  Expectations for cheese prices, supply, and demand over coming months, seem guided by whether the person opining is focused more on domestic or global factors.  Those primarily focused domestically mention expectations of "heavy production of milk" they expect over the next several months, leading to strong supplies of cheese. 

When the focus is more global than domestic, comments tend to focus on a "world-wide slowdown" in milk production.  There is expanding interest and awareness among manufacturers in the potential for cheese exports.  Some Midwest manufacturers say that CWT continues to help make export of Cheddar
from the Midwest work financially, but recent trends make that "less vital to cheese export potential."  It is noted that with milk production in Europe, New Zealand and Australia being below last year's overall level at this time, "U.S. cheese is increasingly profitable to export and lots of it is being exported."  That is making at least some big manufacturers less concerned with the potential market impact of increased milk supplies in coming months, should that occur. 

Markets are reflecting some back and forth as expectations are sorted out, with blocks having lost last week's gains by this Wednesday, closing down 3 cents for the week so far at $1.6450.  Barrels have held at $1.6300, bringing the price spread to 1 1/2 cents, lower than it has been for some time.  Cheese retail advertising volume reported in the National Dairy Retail Report declined 23% from two weeks ago, to the lowest level since the end of November last year. 

The U.S. weighted average advertised price of the most advertised cheese category, 8 ounce shredded, declined by 8 cents to $2.38 from two weeks ago, the lowest level of 2013.  The second most advertised cheese category, 8 ounce blocks, increased in price 2 cents from the lowest level of the year, to the second lowest level of the year, $2.30.  Ads for 8 ounce shredded cheese in the Midwest had a price 21 cents lower than the national average.  For 8 ounce blocks in the Midwest, the average price is 2 cents higher than the national average. 

Cooperatives Working Together (CWT) has accepted requests for export assistance to export 956,806 pounds of Cheddar and Monterey Jack cheese. The product will be delivered February through August
2013.  From the year-to-date, CWT has assisted member cooperatives in selling 22.613 million pounds of cheese.

Source: USDA


Posted on Friday, February 22, 2013 (Archive on Friday, March 01, 2013)
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