The tone of the US cheese market has weakened over the past few weeks, with available supplies outpacing growth in local commercial disappearance. CME cheese barrels are again at a discount to blocks at US$3,737/t and US$3,897/t respectively. It now appears the US cheese market is increasingly dependent on export market orders. The overall decline in the Class III stream in recent trading sessions also reflects a bearish tone in the whey complex, with weaker export orders in addition to a steadier “high protein concentration” whey market reflecting the anticipation of reopening gyms across the country. Latest CME dry whey prices are reported at US$1,383/t.

Butter prices have improved however at US$3,930/t. There is uncertainty and with market participants waiting to see to what extent butter will be used in the USDA’s Dairy Donation US$400m program. Retail sales of butter have slowed considerably, but foodservice has improved. Overall, NFDM is the most bullish product, reflecting slower milk growth in the West, and an increase in import demand from Mexico given the major drought in that key partner country. Anecdotal milk production issues are still not being reflected in official government figures. For now, CME NFDM prices appear to have stabilized at US$2,916/t, still at a discount relative to Oceania but almost on par with Europe.