MD_DA830
DA
MD DA830 Cheese - Midwest
MADISON, WI. January 23, 2013 (REPORT 4)
MIDWEST CHEESE:
There continues to be regionally "heavier than expected" milk production.
Thus, coupled with what some manufacturers characterize as recent "declines"
in fluid milk consumption, regionally the result is "there still appears to
be plenty of cheese around". CME trading last week and this week seems to
be reflecting these market factors. Blocks through this Wednesday are down
$.0600 from last week on Monday to $1.6600 and barrels are down $.0725 for
the period to $1.6000. Barrels were last below $1.6000 on June 19 last year
and blocks were last below $1.6600 last July 11. Where price trends will go
is now a matter of active discussion. Some plant managers believe some
price weakness remains, based solely on expectations for milk supplies.
Others observe that the CME moves based on a variety of factors in addition
to basic milk supplies. Nevertheless, as a point of price reference, one
year ago barrels closed at $1.4850 and blocks at $1.5050. Aside from its
prominence in cheese manufacturing volume, the Midwest also stores more
cheese than any other region and generally has lower average advertised
prices than the national average. Cheese retail advertising volume
nationally reported in the National Dairy Retail Report is up 7.8% from two
weeks ago. The largest percentage of cheese ads nationally, 51.4%, are for
8 ounce shredded cheese. The Midwest is a similar, percentage 48.7%. Ads
for 8 ounce block are at similar levels nationally, 35.9%, and in the
Midwest, 33.7%. So too with 1 pound block, 9.3% nationally and 6.7% in the
Midwest. Relatively few ads nationally are for 1 pound shredded, 2.5%, and
2 pound block, 0.9%. Most average advertised cheese prices in the Midwest
are lower than the national average. The weighted average advertised price
of 8 ounce shredded declined nationally 1.2% to $2.44, in contrast with
$2.21 in the Midwest; 8 ounce blocks declined nationally 3.6% to $2.40
compared with $2.29 in the Midwest; 2 pound blocks increased 26.1% to $6.52;
1 pound blocks increased nationally 2.0% to $4.08, $3.72 in the Midwest; and
1 pound shredded increased nationally 17.5% to $3.90, $3.97 in the Midwest.
Total natural cheese stocks in refrigerated warehouses nationally on
December 31, 2012, 987.8 million pounds, were up 5% from the previous month
but down slightly from December 31, 2011. The composition of cold storage
stocks on December 31 last year was American, 61.2%, Swiss, 3.5%, and Other,
35.3%. Nearly 74% of the stocks of cheese categorized as "Other" were
stored in the East North Central States (Wisconsin, Michigan, Ohio, Illinois
and Indiana) as of December 31, 2012. Nearly 42% of American cheese was
stored in the region. American cheese stocks December 31, 2012, 604.9
million pounds, were up 4% from the previous month but down 1% from the
previous year. Swiss stocks on December 31, 2012, 34.5 million pounds, were
up 12% from the previous month and up 25% from the previous year. Finally,
Other natural cheese December 31, 2012, 348.5 million pounds, were up 6%
from the previous month but down 1% from the previous year. Cooperatives
Working Together (CWT) has accepted requests for export assistance to
sell 3.814 million pounds (1,730 metric tons) of Cheddar and Monterey Jack
cheese to customers in Asia, the Middle East and North Africa. 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 : 1.8500-2.5550
Brick And/Or Muenster 5# : 2.0900-2.6500
Cheddar 40# Block : 2.0900-2.9625
Monterey Jack 10# : 2.0600-2.9625
Blue 5# : 2.3550-3.3400
Mozzarella 5 - 6# (Low Moisture, Part Skim): 1.9350-3.0625
Grade A Swiss Cuts 6 - 9# : 3.3575-3.4750
1:00 CST eric.graf@ams.usda.gov
Midwest Cheese Market
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