Cheese
EU cheddar price bridges the gap to the US price level
Europe
Power has shifted to the buyside
The EU cheese prices have all trended down in these past weeks, in accordance with the good availability of milk and the high fat content. This means that most of the EU cheese factories have been processing more milk than they had planned and that the availability of cheese is so good that buyers are comfortable to lean back. Mozzarella prices are about to fall below the EUR 3000 ex works threshold, but several sellers still resist. At this level the EU should win most of the export deals, but this will not offer relief very quickly. The price for Gouda is about EUR 3050 ex works both for Q4 and for Q1 delivery as everybody expects the supply to remain abundant for a little longer. The current price level appeals to a broad segment of the demand side as evidenced by quite good appetite to cover part of the requirements for Q1 and Q2. Cheddar prices, finally, have dropped to EUR 3500-3600 ex works for UK and Irish product, at which level there is much more on offer than on demand. Eastern EU cheddar changes hands at prices just below EUR 4000, but this market is quite locally oriented.
Americas
The market still feels somewhat balanced in the nearby, but challenges are on the horizon
Both colored and white US cheddar are currently priced at USD 1.72-1.75/lb (3790- 3860/t), ex works. The market feels balanced for fresh cheddar, but long on older material. Some technological challenges at a big mozzarella plant have the potential to break that balance if there is a temporary lean towards mozzarella production, but other than that things feel overall stable to weak at the moment. Manufacturers do have questions about what happens after holiday purchases are in the books. Domestic demand will need to be strong as the US is losing or lost its export competitiveness on mozzarella and cheddar, particularly versus European prices.
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