MD_DA830                                                         
DA                                                               
MD DA830 Cheese - Midwest                                        

MADISON, WI.  July 1, 2015 (REPORT 26)                          

MIDWEST CHEESE:                                                  
                                                                 
Strong cheese sales have been normal in the Midwest for some time and that is 
contributing to some manufacturers playing more hardball in price 
negotiations.  There were early week calls to some manufacturers seeking spot 
loads of cheese which manufacturers had available, but opted to hold for 
later sale when buyers would not meet seller's current price expectations.   
Noteworthy is the confidence of manufacturers in being willing to hold cheese 
for future sale, rather than accept slightly fewer cents a pound to sell in 
early July rather than late June.   Profitability is looking good this year 
for Midwest cheese manufacturers as the half way point of the year is 
reached.  The overwhelming majority of comments looking forward a few months 
are confident about selling however much cheese a plant can make.  Running a 
plant full out or nearly so maximizes efficiencies of production, so aside 
from concerns with finding times to do maintenance, full production schedules 
contribute to efficiency of production in addition to sales volumes.  While 
it sounds like a broken record, there is still lots of milk, especially now 
through the end of the holiday weekend.  Many cheese plants are already 
running full schedules and may not be able to take much advantage of holiday 
surplus milk priced below Class.  Those that can absorb surplus milk are 
finding tentative offers occasionally as low as $5.00 below Class depending 
on timing and location.  Most cheese plants in the region will have full 
schedules over the 4th of July holiday weekend.  At some plants even many 
managers are planning to be at work at least some parts of Friday, Saturday 
and Sunday, to help ensure that production continues flowing on schedule, as 
well as to keep motivating workers who have in many cases have sacrificed 
family time to work overtime for many weeks to cope with milk volumes being 
made into cheese.   Some plants are reporting that components are beginning 
to decline - not in any alarming way - slightly from recent weeks, as is 
seasonally normal.  In much of the region the weather has been excellent for 
cows, high 70's many days and frequent light rains.  This has also led to a 
good crop year, with second cutting of hay alfalfa completed in much of 
Wisconsin.  Corn in some areas will be nearly shoulder high by the 4th of 
July.  These factors are working together in the opinion of cheesemakers, to 
contribute to expected good milk production over the next few months.  In 
much of the region, the end or near end of the building of aging cheese 
stocks has been reached.  That leaves more milk flowing into American type 
cheeses.  The National Retail Report - Dairy (DMN) found that June 26 to July 
2 Midwest ads for 8 ounce shredded cheese have a weighted average advertised 
price of $2.04, 24 cents lower than the national average, $2.28.  Midwest 
prices range from $1.66 - $2.99.  One year ago the national average price was 
$2.30.  For 8 ounce blocks, the Midwest average price is $1.93, 24 cents 
lower than the national average price, $2.17.  Midwest ads are priced from 
$1.59 to $2.99.  One year ago the national average price was $2.44.  
Wisconsin wholesale prices for 1,000 to 5,000 pound mixed lots of process 
cheese declined $.0250, Swiss is unchanged and the remaining varieties 
declined $.0400.  Cheese markets have shown some weaker prices last week into 
early this week, as relatively large numbers of loads of blocks and barrels 
changed hands at the CME Group.  In CME Group trading Tuesday, Barrels closed 
at $1.5825, down $.0725 from last Tuesday and Blocks closed at $1.6200, down 
$.0600 from last Tuesday.   

WISCONSIN WHOLESALE SELLING PRICES:  DELIVERED,                  
DOLLARS PER POUND (1000 - 5000 POUNDS MIXED LOTS)                
                                                                 
Process American 5# Loaf                   : 1.7525-2.1125       
Brick And/Or Muenster 5#                   : 2.0400-2.4650       
Cheddar 40# Block                          : 1.7675-2.1625       
Monterey Jack 10#                          : 2.0150-2.2200       
Blue 5#                                    : 2.3075-3.2950       
Mozzarella 5 - 6# (Low Moisture, Part Skim): 1.8400-2.7800       
Grade A Swiss Cuts 6 - 9#                  : 2.7000-2.8175       

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