Cheese stocks typically grow throughout the spring, as the flush pushes more cheap milk to cheese processors, and demand ebbs. But this year, spot milk wasn’t all that cheap, both export and domestic demand soared, and cheese stocks shrank. The supply of cheese in cold storage warehouses declined in March, April, and May. At the end of last month, cheese inventories totaled 1.44 billion pounds, 3.7% less than in May 2023 and the lowest May tally since 2019. That helps to explain why cheese prices climbed so high in April and May, but it was not enough to push them higher in June. At these prices, it’s difficult to win new export business, and mozzarella sales are slowing. But domestic demand for other cheeses remains strong. USDA sums up the sentiment from industry stakeholders, saying, “Cheese markets are not bullish or bearish, but indecisive.” That uncertainty was on full display on LaSalle Street. CME spot Cheddar blocks climbed 6.5ȼ to $1.91 per pound. Barrels fell 4ȼ to $1.88.
Strong domestic demand continues to support the whey product market, while exports languish. USDA notes that loads meeting specific brand or protein distinctions are trading “at and above the $0.45/lb. mark, while loads marked for export are still being reported in the upper-$0.30s.” Firm demand at home helped to lift CME spot whey powder 2ȼ this week to a four-month high at 49ȼ.
July 1, 2024
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