MD_DA830 DA MD DA830 Cheese - Midwest MADISON, WI. October 07, 2015 (REPORT 40) MIDWEST CHEESE: Midwest cheese production is easily accommodating regular milk supplies, with little availability of extra milk. Customer interest in cheese purchases from manufacturers in the past week or so has slowed, due to the fluctuating prices and customer interest in seeing more price stability before committing to needs beyond immediate needs. Over the longer period of the last month or so, American cheese sales have been quite strong and helped prevent recent increased American cheese production from leading to burdensome inventories. Strong but typical early fall demand for Mozzarella cheese has helped manufacturers move higher regional production out the door. Manufacturers in the U.S. note the narrower difference between U.S. cheese prices and GDT prices compared with earlier in the year, as easing the pressure from cheese imports. Regional grass-fed milk production is nearing the end of the grazing season. Production this year has benefited from very good pastures. Cheese inventories are being held with confidence for sale in coming months. While previously the market niche was typically dominated by smaller specialty cheese manufacturers, there is increasing interest from established larger cheese manufacturers, which has increased competition for grass-fed milk supplies. The DMN National Retail Report - Dairy shows that October 2 - October 8 Midwest ads for 8 ounce shredded cheese have a weighted average advertised price of $2.14, 26 cents lower than the national average. Midwest prices range from $1.48 - $2.50. One year ago the national price was $2.29. For 8 ounce blocks, the Midwest average price is $2.09, 35 cents lower than the national average price. Midwest ads are priced from $1.48 to $2.50. Last year, the national price was $2.39. The CME Group September 2015 monthly average price for barrels, $1.5840, compares with $1.6689 in August this year and $2.3663 for September one year ago. Blocks' September average price, $1.6605, compares with $1.7111 in August this year and $2.3499 in September last year. Dairy Products (NASS) reports August 2015 U.S. total cheese production, 974.4 million pounds, was 3.5% more than a year ago but is 1.7% below July this year. Total 2015 cumulative U.S. cheese production through August was 2.5% ahead of the same months during 2014. In the Midwest, cheese production for August 2015 compared with August 2014 was: total cheese, +5.1%; American, +3.5%; cheddar, +2.7%; total Italian, +6.4%; and mozzarella, +6.8%. Midwestern wholesale prices are down $.0450 for Swiss cuts, up $.0475 for process, and up $.0675 for all other types. CME Group trading last Friday left the block/barrel spread at $.1300, called unsustainable by many cheesemakers, with $.0300 to $.0400 considered normal. In CME Group trading Wednesday, barrels closed at $1.6200, up $.0575 from last Wednesday and blocks closed at $1.7275, up $.0575, leaving the spread narrower but still $.1075. WISCONSIN WHOLESALE SELLING PRICES: DELIVERED, DOLLARS PER POUND (1000 - 5000 POUNDS MIXED LOTS) Process American 5# Loaf : 1.6650-2.0250 Brick And/Or Muenster 5# : 2.0450-2.4700 Cheddar 40# Block : 1.7725-2.7750 Monterey Jack 10# : 2.0200-2.2250 Blue 5# : 2.3125-3.3000 Mozzarella 5 - 6# (Low Moisture, Part Skim): 1.8450-2.7850 Grade A Swiss Cuts 6 - 9# : 2.7850-2.9025 1300C eric.graf@ams.usda.gov 608-557-7010 USDA/AMS/Dairy Market News, Madison, Wisconsin Dairy Market News website: http://www.ams.usda.gov/market-news/dairy Dairy Market News database portal: http://www.marketnews.usda.gov/mnp/da-home