Cheese
CME cheese markets moved upward. Spot blocks climbed to $1.7350 per pound, up 3 cents, and barrels closed at $1.7300, 6 cents higher.
Last week, the U.S. dollar had the worst week-to-week performance since 1995 and that, combined with global dairy price premiums, should spark some export interest and support domestic prices.
It was a noisy week with tariff uncertainty, and the markets remain on edge to see what next week brings.
U.S. cheese exports got off to a strong start in 2025, with outbound volumes totaling 103 million pounds in January, up 22% (+18 million pounds) on the year.
As we move through 2025, the dairy industry is poised to experience significant transformations. According to Ben Laine, a senior dairy analyst with Terrain, there are three major structural changes that are intricately linked and set to shape the industry’s landscape: federal milk marketing orders, new cheese processing capacity, and trade dynamics.
Cheese and butter are clear deals in the export space — but some traders indicate that tariff uncertainty has given them a reason to pause on what would normally be lucrative purchases.
At a pivotal junction of prosperity intertwined with uncertainty, the U.S. dairy industry seeks resolution to ongoing trade disputes. With committed leaders aiming to expand international partnerships, strategic negotiation appears essential for sustaining and enhancing the industry’s growth.
U.S. tariffs are in full effect with Canada, Mexico and China, contributing to the already heavy atmosphere.
Tariffs set to take effect tomorrow may have contributed to market movement, while increased cheese production capacity continues to weigh on the outlook.
After what had been a pretty quiet month, the spot cheese market finished February with a thud.
The on-again, off-again rollercoaster in terms of trade and tariff headlines continued today, following an early morning post from President Trump.
Class III futures are still trading at a discount to current spot prices, indicating an expectation of a significant spot market break.
Class III futures tumbled further, with the March contract down 31 cents to $18.70 per hundredweight and Q2 futures settling at $18.33, a 23-cent loss.
Coming off Friday’s January Milk Production report, which was lower than expected, dairy markets largely moved lower this morning.
Today’s USDA Milk Production report will likely set the tone for the week ahead.
Cheese futures experienced strong activity, posting gains across the forward curve.
Today, futures reacted to strong offers on the spot auction for block cheddar cheese, which had been a point of strength for seasonally high cheese prices.
Dairy markets weren’t feeling the love today, with both Class III and Class IV mostly moving lower.
The softness in butter continues to line up with anecdotal reports that butterfat levels are high and cream is available
Class III futures started the day 10-20 cents lower in the nearby contracts before a positive spot cheese auction brought them up on the day.
The CME butter market rebounded off its recent lows, climbing to $2.4300 per pound, gaining a nickel.
Much like the Philadelphia Eagles’ dominant Super Bowl victory, the cheese market put up a strong performance today, with blocks and barrels climbing higher in the spot session.
Class III futures tumbled today, erasing the week’s stronger activity following a weaker spot session.
U.S. cheese exports surged ahead in December, totaling 96.7 million pounds.
Class III futures were on a roller coaster with back-and-forth tariff news.
“It’s unlikely that changes in tariffs will impact prices headed into the Super Bowl, however, we’ll see how it plays out in the coming weeks,” Dr. Michael Swanson says.
Ramped up conversations around possible 25% tariffs on Mexico and Canada plus 10% tariffs on Chinese goods sent the cheese market sharply lower last night and weakness continued through today’s session.
Dairy cow slaughter rates are well above prior-year levels. For the week ending January 18, culling totaled 58,000 head, up 13.5% on the year.
Class III futures were reluctant to follow several days of green with further higher price action, and showed modest declines or gains depending on the month.