AS REPORTED BY THE US DEPARTMENT OF AGRICULTURE

WHOLESALE CHEESE MARKETS

NATIONAL - DEC. 23: Cheese inventory reports range from accessible to limited, and vary by region and plant to plant. Production is running as expected. Some plant managers plan to run a very active holiday schedule, as they clear markedly more spot milk loads this week due to the discounts, while others say they are taking some holiday downtime. Contacts view the cheese market tone with some trepidation based on the current price gap.

NORTHEAST - DEC. 29: Milk supplies are available for Class III production. Cheesemaking is active in the region, although some facilities will take a production break for the holiday.

Inventories are sturdy, and cheese is available for spot and contract needs. Retail sales are strong; recent reports suggest grocery shoppers still have healthy appetites for cheese. As Omicron variant uncertainties persist and case counts climb, foodservice demand is said to be faltering. Spot market activities have been quieter during year-end, holiday-shortened trading weeks. Through Tuesday of this week, cheddar block prices shifted higher on the CME group, while barrel prices sank beneath last week’s average.

MIDWEST AREA - DEC. 29: Some Midwestern cheese makers are very busy during the holiday season as spot milk prices are falling at somewhat strong discounts, which are expected in the culminating weeks of any year. Spot milk prices are from $4 to $2 under at report time. Although discounted, spot milk is somewhat pricey compared to the final week in 2020. Last year’s spot milk prices reached $10 under Class III during week 53. Cheese demand has maintained strength coming into the holiday season. Now, there are some questions as to how cheese stocks will hold up once customers come back to the table in early 2022. Despite a relatively large gap between block and barrel prices on the CME, there are some near term bullish market undertones according to cheese market actors.

WEST - DEC. 29: Demand for cheese is steady in retail markets, while foodservice sales are declining. Contacts say that rising COVID cases in the region and winter school closures are contributing to a decline in foodservice purchasing. Demand for cheese in international markets is strong. The ongoing shortage of truck drivers has been exacerbated by the holidays and poor weather, increasing delays to deliveries of loads. Export loads of cheese are facing further delays due to port congestion. Spot availability for cheese barrels and blocks is unchanged. Milk is available for production in the region, though some contacts report difficulty with moving loads in areas hit with bad weather. End of year holidays, staffing shortages, and shipping delays are contributing to reduced cheese production schedules.

FOREIGN -TYPE CHEESE - DEC. 29: Western European cheese manufacturers are pleased with the staying power of what they classify as near-record cheese prices. Manufacturers are also exhausted by the stress of fielding customer orders they cannot fill, as well as by many customer calls cutting or delaying shipments. The firmness of cheese markets now is considered far greater than the end of recent previous years. Almost all scheduled January 2022 cheese production is already sold. While the pace of activity this last holiday week of the year is typically slower, the stress of unmet demand is expected to resume next week.