MD_DA830                                                         
DA                                                               
MD DA830 Cheese - Midwest                                        

MADISON, WI.  May 27, 2015 (REPORT 21)                           

MIDWEST CHEESE:                                                  
                                                                 
The continuing strength of cheese production utilizing strong 2015 
milk supplies is leading manufacturers to consider how long the 
somewhat surprising demand strength from cheese buyers will continue.  
Unexpectedly strong demand from domestic buyers has helped to keep 
cheese inventories at comfortable levels notwithstanding high 
production volumes.  Both retail and foodservice buyers have helped 
keep cheese moving out of plants.  Most cheesemakers do not suggest 
any reason why they question this trend continuing.   That conclusion 
is reflected in volumes of cheese being made.  At most cheese plants 
where alternative products can be made from milk, cheese is still 
viewed as the primary outlet for contracted milk from the producer 
base.   If capacity allows, surplus milk is being purchased as well.  
A few loads of Midwest surplus milk sold at $10.00 below Class this 
week, more loads are selling near $7.00 below, and milk more widely 
available as to timing and location now sells at $6.00 under.  Some of 
the production will go to current demand and some will be held in 
inventory for future sales, both by manufacturers and 
cutters/wrappers.  Most cheesemakers are happy to increase schedules 
to the max to accommodate discounted milk.  There are also cheese 
plants in the region currently installing new equipment to add barrel 
production to existing block production in the near future.  In part, 
the expenditures are deemed warranted by virtue of expectations for 
future milk availability to support the increased cheese production.  
The National Retail Report - Dairy (DMN) found that May 22 to May 28  
Midwest ads for 8 ounce shredded cheese have a weighted average 
advertised price of $2.10, 29 cents lower than the national average, 
$2.39.  Midwest prices range from $1.49 - $2.49.  One year ago the 
national average price was $2.52.  For 8 ounce blocks, the Midwest 
average price is $2.13, 17 cents lower than the national average 
price, $2.30.  Midwest ads are priced from $1.67 to $2.49.  One year 
ago the national average price was $2.48.  At the end of April, 
Midwest region cheese stocks tended to be higher than national stocks.  
NASS reports that April 30, 2015 East North Central region (Wisconsin, 
Illinois, Michigan, Indiana and Ohio) American cheese stocks were 107% 
of April 30, 2014, and 104% of March 31, 2015.  East North Central 
region other cheese stocks were 106% of April 30, 2014 and 103% of 
March 31, 2015.  Total U.S. natural cheese stocks on April 30, 2015 
were 104% of April 30, 2014 and 101% of March 31, 2015.  In CME Group 
trading Wednesday, Barrels closed at $1.6050, down $.0100 from last 
Wednesday and Blocks closed at $1.6600, up $.025 from last Wednesday.   


WISCONSIN WHOLESALE SELLING PRICES:  DELIVERED,                  
DOLLARS PER POUND (1000 - 5000 POUNDS MIXED LOTS) 
                                                               
Process American 5# Loaf                   : 1.7225-2.0825       
Brick And/Or Muenster 5#                   : 2.0150-2.4400       
Cheddar 40# Block                          : 1.7425-2.1375       
Monterey Jack 10#                          : 1.9900-2.1950       
Blue 5#                                    : 2.2825-3.2700       
Mozzarella 5 - 6# (Low Moisture, Part Skim): 1.8150-2.7550       
Grade A Swiss Cuts 6 - 9#                  : 2.6900-2.8075       


100C eric.graf@ams.usda.gov  608.557.7005
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