Cheese
US capacity increase during low consumption season creates further price pressure
Europe
Stable market but at a delicate balance
The EU cheese market found some support in the good buying volumes in December. Cheese valorization continues to be high and this keeps cheese plant utilization levels close to 100%. Still, it appears that these large volumes of cheese production find their way into the market, both within the EU and to export destinations. The January consumption levels are not always the best but so far it looks like consumers appreciate the price relaxation on the supermarket shelves. This makes for a stable sentiment on the EU market, at least momentarily, but the question rises whether this will be sustainable going forward. Gouda prices have firmed a little to about EUR 3000, and Mozzarella changes hands just above EUR 2900 now. Cheddar prices for UK and Irish origin are about EUR 3200 and Eastern EU cheddar is available at EUR 3300, all prices ex works.
Americas
Plant investments coming to life make the US market a little supply heavy
At the start of the new year colored cheddar prices in the US weakened a little further to a range of USD 1.32-1.35/lb (about 2950/t), but white export cheddar gained a few cents and is now in the USD 1.50s/lb range (around 3360/t), both ex works. Export demand is decent enough to give sellers of white cheddar some comfort for Q1. Mozzarella export demand is a little less robust, and mozzarella sellers, though seemingly having a decent order book for Q1, would like to find some more demand in the coming weeks. The supply side in the Midwest and Southwest seem to be a bit heavy on stock levels but they are not in distress. Overall, it is visible that the new plant investments are coming to life with more supply for the market. The domestic demand side had a decent holiday season but the outlook for Q1 is a bit more unclear. Demand will need to strengthen overall before there will be any sort of meaningful positive price direction.
More insights
If you're interested in Cheese, you may also like these topics:
