Midwest Cheese Market

MD_DA830                                                         
DA                                                               
MD DA830 Cheese - Midwest                                        

MADISON, WI.  January 16, 2013 (REPORT 3)                        

MIDWEST CHEESE:                                                  
                                                                 
Cheese manufacturers in the upper Midwest generally agree that 2013 has 
opened with "slow" retail orders and "slightly heavy" milk supplies.  A 
cheesemaker with contracted milk suppliers, reports being "on pins and 
needles to get the milk (volume) manufactured".  While cheese manufacturers 
are attuned to projections of a national decline in milk production during 
the first two quarters, industry discussion increasingly focuses on regional 
differences in production, with the Midwest so far, continuing to have 
enough milk to "occasionally" generate spot sales priced "slightly" under 
class.  While not widespread nor universally available in all areas, these 
spot sales occasionally occur.  Manufacturers lament that retail cheese 
purchases have not been as strong as hoped for.  Varied reasons are 
mentioned.  Recent CME price declines have caused retail orders to slow, as 
professional buyers hold back to allow lower averages to factor into 
pricing.  All price movement through midweek has been down, with Barrels 
down $.0075 for the week through Wednesday to $1.6650 and Blocks down $.0200 
to $1.7000.  This follows last week's decline in the weekly average for 
each.  Looking at the weekly movement of CME weekly averages for the first 
weeks of recent years, shows no decisive trend of up or down.  Some 
manufacturers also observe that retail "in-store promotions" for cheese in 
recent weeks seem to them to be "more sizzle than substance", meaning using 
colorful shelf tags offering "2 for" or "3 for", but with the final single 
unit price not being particularly compelling for consumers.  Weaker retail 
sales are believed to result, in the view of a number of manufacturers.  
Some manufacturers have discounted bulk cheese to move it out of inventory.  
Cooperatives Working Together (CWT) has accepted requests for export 
assistance to sell 1.864 million pounds (846 metric tons) of Cheddar, Gouda 
and Swiss cheese to customers in Asia, the Middle East, North Africa, 
Central and South America. The product will be delivered January through 
June 2013.

WISCONSIN WHOLESALE SELLING PRICES:  DELIVERED,                  
DOLLARS PER POUND (1000 - 5000 POUNDS MIXED LOTS)                
                                                                 
Process American 5# Loaf                   : 1.8750-2.5800       
Brick And/Or Muenster 5#                   : 2.1150-2.6750       
Cheddar 40# Block                          : 2.1150-2.9875       
Monterey Jack 10#                          : 2.0850-2.9875       
Blue 5#                                    : 2.3800-3.3650       
Mozzarella 5 - 6# (Low Moisture, Part Skim): 1.9600-3.0875       
Grade A Swiss Cuts 6 - 9#                  : 3.3575-3.4750       



1:00 CST eric.graf@ams.usda.gov

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