MD_DA830
DA
MD DA830 Cheese - Midwest
MADISON, WI. October 17, 2012 (REPORT 42)
MIDWEST CHEESE:
Cheese markets have been actively declining this week, beginning Tuesday,
following no price movement last week. By Wednesday, over two consecutive
trading days, Barrels had declined $.1325 to $1.9275. The decline in Blocks
Tuesday of 9 cents, lowered the price to $2.0100, which remained after
Wednesday's close. After the price declines this week, both blocks and
barrels remain above prices at this point of each of the last four years.
Even so, prior to this week's price adjustments, there was little
expectation with any genuine certainty, based on non CME supply and demand
factors, that prices would adjust downward so quickly. One large Midwest
cheese manufacturer expressed "surprise" at the magnitude of this week's
price adjustment, noting: (1) manufacturer inventories are tight; (2) cheese
production is below desired levels; and (3) milk available for Class III
use is "tight". Other manufacturers in the region echo those observations
about the current situation. Manufacturers plan to keep producing cheese
with available milk supplies, but few anticipate seeking milk in addition to
presently available volumes, by paying class premiums to increase milk
supplies. Cheese retail advertising nationwide has declined 25.2% compared
with two weeks ago, according to the National Dairy Retail Report. Ad
volume declined for all but one of the five package sizes of natural cheese
reported. Volume was down 15.9% for 8 ounce shredded, the largest
category, down 48.5% for 8 ounce bock, the next largest category, down 12.1%
for 1 pound block, and down 28.9% for 1 pound shredded. Only the smallest
category, 2 pound block, is up, +839.6%. Yet the starting number is so low
compared to the other categories, that a very small change in numbers of ads
magnified the percentage increase relative to all cheese combined.
Cooperatives Working Together (CWT) has accepted requests for export
assistance to sell 2.798 million pounds (1,269 metric tons) of Cheddar and
Monterey Jack cheese and 302,033 pounds (137 metric tons) of butter to
customers in Asia, Central America and the Middle East. The product will be
delivered October 2012 through March 2013. During 2012, CWT has assisted
member cooperatives in making export sales of Cheddar, Monterey Jack and
Gouda cheese totaling 99.7 million pounds, butter totaling 58.4 million
pounds (adjusted for reductions) and anhydrous milk fat totaling 127,868
pounds.
WISCONSIN WHOLESALE SELLING PRICES: DELIVERED,
DOLLARS PER POUND (1000 - 5000 POUNDS MIXED LOTS)
Process American 5# Loaf : 2.2500-2.9550
Brick And/Or Muenster 5# : 2.4900-3.0500
Cheddar 40# Block : 2.4900-3.4750
Monterey Jack 10# : 2.4600-3.4750
Blue 5# : 2.7550-3.7400
Mozzarella 5 - 6# (Low Moisture, Part Skim): 2.3350-3.5750
Grade A Swiss Cuts 6 - 9# : 3.0050-3.1225
1:00 CDST eric.graf@ams.usda.gov
Midwest Cheese Market
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