Cheese
US cheese prices escape the downward trend but for how much longer?
Europe
Valorization of cheese is relatively good in the EU
The EU cheese market has to deal with the fact that the milk volumes flowing to the cheese plants are much higher than anticipated a few months ago. Therefore production levels of cheese are relatively strong and the post-holiday price levels do not exhibit their normal upward trend, on the contrary. Export markets cannot provide much relief either as US origins win most deals. Interestingly, the whey prices are holding their ground, and for this reason cheese remains a profitable outlet in the EU dairy complex, with obvious effect on the availability of EU cheese. Not surprisingly, the prices for all major cheese types have dropped by almost 10% this past month and further downward potential is imminent. Cheddar is now traded at EUR 4000 in the UK and at USD 4150 in Ireland. Mozzarella changes hands below EUR 3600 and Gouda whilst still lingering around the EUR 3700 level is expected to slide further towards the EUR 3600 level that futures are at. All prices are ex works.
Americas
US cheese market prices still hold
The US cheddar prices on the spot markets are largely unchanged from last month at around USD 1.75/lb (3860/t) for colored blocks and around USD 1.82/lb (4000/t) for white export blocks, both ex works. The supply side stock levels are still comfortable but uncertainty is quickly growing with the downward price trend in the milk fat market. This lack of optimism is visible in the futures market where prices are trending down. The domestic demand side is okay but not out of the ordinary. Exports continue to thrive but as the US cannot afford to lose the export market this will remain a point of attention. To summarize the market is still in a feeble balance and the cheese prices have not experienced a drop yet like the butter prices but the futures market indicate that price pressure is likely to emerge.
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