MD DA830 Cheese - Midwest
MADISON, WI. February 13, 2013 (REPORT 7)
Wednesday brought more upward CME daily price movement than has occurred in
a while. The 9 cent spread between blocks and barrels after Monday's close
narrowed to $.0450, with blocks moving up to $1.6750 and barrels up 5 cents
to $1.6300. Prior to Wednesday's price move, industry discussion focused on
last week's cheese weekly averages turning positive, following four
consecutive weeks of negative average price movement. The magnitude of
week-to-week price change this year slowed to the smallest level of 2013
last week. For a number of cheese manufacturers, this was a sign of a
developing market consensus as to where the seasonal price floor is.
Another market participant while acknowledging these trends, characterized
the market early this week as "Bearish with Bullish concerns [having]
definite upside potential". Wednesday seems to have released the bulls.
During this transition period, there is variety among cheese manufacturers
as to how they are proceeding. Over recent weeks, a number of manufacturers
have commented that retail orders slowed when markets trended down.
Retailers were believed to be awaiting lower price averages to buy.
Nevertheless, last week's upward trending cheese price average has yet to
generate any noticeable widespread uptick in retail orders this week. One
explanation is that many retailers "may be waiting to see if the price
strength is real", knowing that "there is plenty of cheese around". A few
manufacturers noted an increase in cheese orders this week, at least for
processed cheese. Mozzarella is viewed as moving "okay". Some
manufacturers are at ease with cheese inventory levels, meaning able to fill
orders that might arise, but not worried about selling what is in storage.
Yet other manufacturers offered discounts to move blocks and barrels in
reaction to strong cheese production volume. Another manufacturer with
plant capacity used only to accommodate heavier milk flows, opened that
capacity this week to produce cheddar barrels for committed buyers. Other
cheese plants are diverting milk from cheese production into butter and
nonfat dry milk. The region's first comment from a cheese manufacturer this
month noting a "slight" drop in milk intakes occurred in Iowa this week.
The situation this week is very mixed. Cooperatives Working Together (CWT)
has accepted requests for export assistance to sell 2.344 million pounds
(1,063 metric tons) of Cheddar and Monterey Jack cheese. The product will be
delivered February through July 2013. For the year-to-date, CWT has
assisted member cooperatives in selling 21.656 million pounds of cheese.
WISCONSIN WHOLESALE SELLING PRICES: DELIVERED,
DOLLARS PER POUND (1000 - 5000 POUNDS MIXED LOTS)
Process American 5# Loaf : 1.7400-2.4450
Brick And/Or Muenster 5# : 2.0350-2.5950
Cheddar 40# Block : 2.0350-2.9075
Monterey Jack 10# : 2.0050-2.9075
Blue 5# : 2.3000-3.2850
Mozzarella 5 - 6# (Low Moisture, Part Skim): 1.8800-3.0075
Grade A Swiss Cuts 6 - 9# : 3.1100-3.2275
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Midwest Cheese Market