After falling to as low as US$2,883/t, cheese barrel prices have recovered, with latest CME quotes at US$3,263/t. CME cheese blocks have also rebounded to US$3,946/t, with the blocks-to-barrels spread back to where it was on August the 10^th (US$683/t). According to local contacts, the improvement in cheese prices can be explained by tighter milk supplies in the Upper Midwest and particularly in the West. Also, stronger exports at competitive prices, some production facility issues and potentially prospects for stronger retail demand given the increase in COVID cases may be at play.

Other products (butter, NFDM and dry whey) remain range-bound for the time being at US$3,726/t, US$2,778/t and US$1,146/t respectively. Butter is still trading higher when compared to the first week of August – the rise was driven by the USDA announcing a butter purchase for delivery in Q4-21. Over the past week, implied spot CME Class III has again moved ahead of Class IV.