Cheese
Approach of the summer boosts mozzarella demand
Europe
Strength in protein prices affect EU cheese price perspectives
Cheese prices in the EU initially trended down during April but when the SMP prices began to rise sentiment changed in the cheese market and prices recovered a little. For Cheddar there are export opportunities at premium levels to the Middle East in particular, where the EU provides better logistics than US origin. Still, there is some pressure on suppliers as there is good spot curd availability at prices of EUR 3300-3350 ex works in the UK and Ireland, but also in Poland. In the Gouda market supply has tightened slightly making life a little easier for the sell side. At the price level of EUR 3400-3450 ex works EU Gouda production capacity is the limiting factor. There is quite some open demand for Mozzarella, as with the approach of the tourism season Southern EU countries are actively seeking product. The Mozzarella market prices received some tailwind from the higher protein prices and are now in the EUR 3390-3450 ex works range. In general it seems that the current strength in the EU milk protein prices has a stronger effect on EU cheese prices than the weakness in the milk fat prices, which is a relatively new development.
Americas
Export performance keeps local market balanced
Cheese prices in the US have been creeping upwards in the past month. For all cheese types combined, the domestic demand is good, growing annually by about 1-2%. Export demand has been near record high recently, particularly for mozzarella. Low stock levels of Italian hard cheeses such as parmesan triggered additional production and in combination with strong mozzarella output this changed the product mix away from cheddar to a certain extent. Colored cheddar prices eased up to levels in the USD 1.60s/lb (3600-3700/t) ex works. White export cheddar prices are in the USD 1.70s/lb (3800-3900/t) ex works and some brands even touch the USD 1.80s/lb level. However, at these prices US white cheddar cannot always compete with EU origin. Going forward the USA will need a good export performance across cheese types to push prices substantially higher.
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