MD_DA830                                                         
DA                                                               
MD DA830 Cheese - Midwest                                        

MADISON, WI.  January 21, 2015 (REPORT 3)                        

MIDWEST CHEESE:                                                  
 
Inventory is building at some Midwest cheese plants.  Contributing 
factors include active cheese production, with some manufacturers 
using their cheese plants to balance the volume of milk intakes, as 
well as some potential buyers pulling back during a falling price 
market.  Once prices began to fall significantly last week, some 
buyers slowed orders in an opportunistic buying strategy.  Other 
buyers are more regular about taking orders and this leaves some 
larger plants with cheese moving out the door mostly as expected.  
Quickly declining markets present a profitability challenge to 
manufacturers because cheese sales are often based off CME Group 
pricing while prices paid for milk used to make cheese are based off 
another index which can lag the rate of CME Group price decline, 
leaving manufacturers with a higher cost basis for cheese sold at a 
lower sales price in markets with rapidly declining prices.  Less 
spot milk is currently available for making cheese this week.  Higher 
cheese production is helping boost cheddar manufacturing as well as 
mozzarella.  The National Retail Report - Dairy (DMN) found that 
January 16 to 22nd  Midwest ads for 8 ounce shredded cheese have a 
weighted average advertised price of $2.58, 4 cents higher than the 
national average, $2.54.  One year ago the national average price was 
$2.39.  The Midwest price range is $1.98 to $3.99.  For 8 ounce 
blocks, the Midwest average price is $2.20, 13 cents lower than the 
national average price, $2.33.  One year ago the national average 
price was $2.29.  The Midwest price range is $1.98 to $2.50.  
Wisconsin wholesale prices for 1,000 to 5,000 pound mixed lots of 
process cheese decreased $.0350, Swiss is unchanged and the remaining 
varieties decreased $.0575.  In CME Group cheese trading, barrels 
closed this week Wednesday at $1.4500, up $.0075 from Wednesday last 
week and blocks closed at $1.4750, up $.0050 from Wednesday last 
week.   

WISCONSIN WHOLESALE SELLING PRICES:  DELIVERED,                  
DOLLARS PER POUND (1000 - 5000 POUNDS MIXED LOTS)                
                                                                 
Process American 5# Loaf                   : 1.6150-1.9750       
Brick And/Or Muenster 5#                   : 1.8950-2.3200       
Cheddar 40# Block                          : 1.6000-2.0175       
Monterey Jack 10#                          : 1.8700-2.0750       
Blue 5#                                    : 2.1625-3.1500       
Mozzarella 5 - 6# (Low Moisture, Part Skim): 1.7400-2.6350       
Grade A Swiss Cuts 6 - 9#                  : 3.6225-3.7400       

100C eric.graf@ams.usda.gov
USDA/AMS/Dairy Market News, Madison, Wisconsin
Dairy Market News website: www.ams.usda.gov/dairymarketnews
Dairy Market News database portal: http://www.marketnews.usda.gov/mnp/da-home