US cheese prices crash

by | Nov 18, 2020 | Global, Prices

As expected with the gradual loosening of cheese supplies, propelled by increasingly smaller volumes sought for food aid programs, CME cheese markets continued to be highly volatile, this time dropping by record daily amounts. Blocks fell more than US$2,100/t over the past two weeks to $3,902/t. Cheese barrel prices crashed even more dramatically over the same period, losing close to US$2,500/t to sink below US$3,100/t, which will surely pique the interest of some buyers in import markets. The blocks-to-barrels spread, which on 5 November fell to just $US22/t, widened to more than US$1,100/t before last night’s further fall in block prices.

Moreover, government purchases more than halved in November which has contributed to the loosening of the market. As a result, in the Midwest, spot milk is reported by USDA as being sold US$5/cwt below class prices.

December cash-settled cheese futures prices have also slumped – not as dramatically as spot prices – losing more than US$500/t in the past week, while the losses in later contracts have been much milder as they have for some time priced in a loosening of the market.