Cheese
Contrary price developments in EU and US
Europe
Cheese prices are slowly slipping across the board
Due to better than expected summer milk production, declining prices for milk fat and absence of relief from exports, pressure is rising in the EU cheese markets. Some manufacturers are more relaxed than others, but most sellers have a lot of product on their hands while demand is temporarily absent. The sell side still has the hope that demand will come alive again after the summer holidays and create a more stable market balance. The Mozzarella price clings on to the EUR 4000-level while Gouda still trades mostly just above the EUR 4000-mark. Cheddar prices continue to slide to a level of EUR 4300 for UK product, EUR 4300-4400 for Irish product and EUR 4400-4500 for Polish Cheddar, all prices ex works.
Americas
Demand for younger cheddar helps raise prices
Overall, the supply of milk is healthy and the good solids are keeping cheese production at a strong level. The supply of colored blocks for the domestic market is good, and producers are keen to make white blocks for the export market as well. As it is holiday time still the domestic demand for colored cheddar remains a little weak but last week there has been more buying interest for younger cheddar (30 days or less). This demand pushed prices up somewhat to the current level of USD 1.78/lb (3925/t) ex works. There is also growing interest from traders to buy as they find the carry in the curve quite interesting. On the export front the price for white blocks seems to be stable at about USD 1.80-1.85/lb (just above the USD 4000/t level) ex works. International demand does not feel quite as strong as it was earlier this year, but US origin remains the cheapest in the world, both spot and in the forward market.
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