Cheese
Export competition between US and EU heats up
Europe
Good valorization indicates further downward pressure to be expected
The EU cheese market was quite lively these past few weeks. By now most of the buyers have covered their needs well into Q1 but most sellers still have a little more cheese in their hands than they would have liked to. Cheese in general still enjoys good valorization in the dairy complex and this creates further pressure on the cheese price levels going forward. Mozzarella producers have product on offer at EUR 2800-2850 ex works for December and Q1 but struggle to find a buyer. With Q2 futures at about EUR 2900 the buyside can afford to wait. US and EU mozzarella compete on the export markets and South Korea is eager to benefit. The price range for Gouda depends on the origin but the average is EUR 2850-2950 ex works, i.e. similar to our early November quote. The buyside is covered for the most part of Q1 and there is still volume to be sold. On the Cheddar market EU exporters compete with US product. Eastern EU producers are in the market at EUR 3300-3400 ex works but the pressure to sell is much higher than in November. The sell side is more relaxed in the UK and Ireland at the price range of EUR 3000-3150, with the UK on the low end of the range and Ireland at the high end.
Americas
Swift price fall leaves market participants a bit puzzled
The US Cheddar prices have been tumbling down in recent weeks. Colored blocks are now trading in the range of USD 1.38-1.48/lb (3040-3260/t) and white block prices hover a few cents above or below USD 1.50/lb (3310/lb), both ex works. With such a strong decrease, market participants are trying to figure out the new normal market balance. Export demand remains decent, but competition with EU origin is getting stiffer, particularly in mozzarella. If mozzarella exports remain challenging in Q1, producers are expected to up their cheddar production instead. Overall domestic demand is tepid to flat. The market anticipates that producers will have more spot cheddar to sell in 2026. Milk production growth remains strong and there are more signs of this continuing into H1 than a reversal of the trend.
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