MD_DA830
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MD DA830 Cheese - Midwest
MADISON, WI. October 24, 2012 (REPORT 43)
MIDWEST CHEESE:
Few explanations for the latest increase in CME cheese prices are
forthcoming from manufacturers, at least explanations based on manufacturing
volume and retail ordering. Through Wednesday, blocks have increased for
the week $.0550, reaching $2.0550, and barrels by $.1075, reaching $2.0250.
A number of manufacturers presently have cheese backing up, attributed to
softer retail demand. Thus, with a number of manufacturers holding cheese
they hope to sell, cheese that is available to sell, the reasons for CME
prices increasing as they have leaves a number of manufacturers perplexed.
For cheese to reach retail stores in time for the beginning of the Christmas
to Super Bowl season, the cheese generally must leave manufacturing plants
by early November. That date is getting closer. The recent gyrations of
CME prices have been viewed as impeding the smooth flow of retail ordering.
With CME price movements up and down in a repeating cycle over recent weeks,
and with most pricing to retailers based off CME prices, "retailers see
price uncertainty" and slow buying, according to a manufacturer. This
factor is what most manufacturers believe is a big contributor to cheese
backing up at plants this week more than had been anticipated. These events
cause some concern over potential for a period of prices and production
gyrating and overshooting signals from each other with each reaction, before
a more normal equilibrium is reached. Meanwhile, in reaction to less buyer
ordering during this week, some plants in the region have slowed
manufacturing, at least of non-Mozzarella varieties, even as CME prices
increase. The Kansas City Farm Service Agency Commodity Office on Monday
announced contract awards to purchase a maximum of 76.4 million pounds of
process cheese for delivery between January 1, 2013 and December 31, 2013.
Purchase prices will be determined by a stated differential price per pound
varying from -$0.0595 to +$0.2649 per pound, plus the previous month's
average of the CME cash price, for barrel cheese trading as reported in
Dairy Market News. In the East North Central States, (Wisconsin, Illinois,
Indiana, Michigan and Ohio), American Cheese stocks in September were down
1% from August the same as the national percentage, but up 3% from September
last year, quite different from the national 5% decline. As for "Other"
cheese, the North Central states were down 2% from August compared with 1%
nationally, but up 1% from September last year in contrast with being down
5% nationally. Total September natural cheese stocks were down 1% from
August and down 5% from September last year. Total cheese stocks are also
below the September level two years ago, but are above 2009. Swiss cheese
stocks for September were even with August, but 92% of September last year.
Cooperatives Working Together (CWT) has accepted nine requests for export
assistance to sell 2.262 million pounds (1,026 metric tons) of Cheddar,
Gouda and Monterey Jack cheese to customers in Asia, the Middle East, North
Africa and the South Pacific. 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 102
million pounds.
WISCONSIN WHOLESALE SELLING PRICES: DELIVERED,
DOLLARS PER POUND (1000 - 5000 POUNDS MIXED LOTS)
Process American 5# Loaf : 2.1475-2.8525
Brick And/Or Muenster 5# : 2.4150-2.9750
Cheddar 40# Block : 2.4150-3.4000
Monterey Jack 10# : 2.3850-3.4000
Blue 5# : 2.6800-3.6650
Mozzarella 5 - 6# (Low Moisture, Part Skim): 2.2600-3.5000
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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