Cheese
Cheddar prices are beginning to realign
Europe
The pre-Christmas market weakness proved to be temporary
The come back of the EU cheese market after the Christmas holidays was strong. The pre-holiday weakness turned out to be temporary and the market feels again stable and balanced with a slightly bullish undertone. Manufacturers are generally quite relaxed about their sales opportunities. The temporary abundance of Mozzarella supply vanished in early January and prices bounced back up to around EUR 4000 ex works which implies that prices have more or less equalized the world over. Exports are OK without being spectacular. Since Christmas Gouda prices also came back up by some EUR 150 to a level of EUR 4200 ex works. The age of most of the Gouda traded is stable and supply and demand are balanced. Depending on the manufacturer Cheddar prices are quite differentiated but the bulk of trades from all origins materialize around a level of EUR 4625 ex works.
Americas
Cheddar supply tighter because of good mozzarella market circumstances
These past few weeks mozzarella demand was good which triggered processors to divert more milk to Italian cheese processing to the detriment of cheddar production. As a result, the prices in the US cheddar market moved up a fair bit. Blocks are now traded at USD 1.90-1.95/lb (4190-4300/t) and barrels at USD 1.85-1.90/lb (4080-4190), both ex works. Domestic demand for both types of cheese is steady, and as export demand is particularly good for mozzarella the domestic market is supported at the current price level. Going forward it is expected that the demand side will determine the price trend, with any strengthening of demand able to push prices up and vice versa.
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