Cheese Prices Surge Amid Seasonal Demand and Supply Constraints
Recent market trends indicate a significant uptick in cheese prices, with block cheese reaching $2.10 per pound, its highest level since March 27, 2023. Barrel cheese has also climbed to prices not seen since June 9, 2022. This price surge comes after a relatively stable summer period and is attributed to increasing buyer activity in anticipation of fall and holiday demand.
The cheese market is facing pressure from multiple angles. A shift in milk allocation towards school bottling needs has tightened the supply available for cheese manufacturing. Consequently, spot milk prices have risen to as much as $2.00 above class prices, with further increases expected in the coming months.
Adding to the supply squeeze, overall milk production is projected to remain below last year’s levels for the remainder of the year. The US Department of Agriculture has revised its milk production estimate downward by 600 million pounds, forecasting a total of 226.3 billion pounds for the year.
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Butter prices have also seen a significant boost, reaching levels not observed since October 31, 2023. Despite record trading volumes, prices have stabilized due to sellers’ willingness to meet increased demand at current price points.
The dairy market also saw a substantial jump in butterfat exports for June, showing an 80% increase year-over-year. Notably, anhydrous milk fat exports soared by 490%, while butter exports rose by 32%.
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