Could Fewer Holiday Casseroles Throw Off Cheese Demand?

With this holiday season looking to be a little different than normal, fewer holiday get-togethers are expected to bring down the demand for one of dairy’s most popular products. AgDay’s Clinton Griffiths spoke with Total Farm Marketing’s Naomi Bloom to discuss cheese demand during the holiday season.

“Typically, this a big time of year for cheese demand,” Bloom says. “Usually we see that market price move higher as end users and restaurants and different holiday parties are booking their needs.”

However, due to the coronavirus pandemic, this year is far from normal.

“Things are definitely different,” Bloom says. “The cheese market and cheese demand have been strong because of the Farm to Families program. That demand had been there and that's what lifted the Class III futures prices higher. But now, ever since the election, sentiment has shifted and the Farm to Families program is coming to the end at the end of December.”

With these programs are coming to an end, the demand for cheese is slowing. Additionally, the holiday demand for the product just isn’t there like it used to be, according to Bloom.

“We're seeing that reflected on the milk futures prices,” she adds. “You know, that November price was up, but now, just in the past few days and a few weeks, the December contract has lost over $2 in deferred milk contracts. So, we're looking at the reality of less demand for cheese.”

Another hindrance is the increase in milk production, according to Bloom. However, she believes that the worst of the coronavirus hangover is behind us.

“I would say that the worst is behind us in the sense because we knew that the cheese buying program was going to stop,” Bloom says. “And so, the milk, I think, is priced appropriately at this time going forward. The export base has actually been fantastic for dairy products and the dollar has been keeping working lower. So that's going to be a bright spot heading into 2021But again, we need that restaurants to get reopened and we need more people to be able to get together just to keep that cheese demand up.”