MD_DA830                                                         
DA                                                               
MD DA830 Cheese - Midwest                                        

MADISON, WI.  December 16, 2015 (REPORT 50)                      

MIDWEST CHEESE:                                                  
                                                                 
In many ways, cheese production is driven as much by available milk supplies and 
pricing, as by carefully plotted and shifting strategies that change weekly. This 
week is similar to recent weeks in that regard. Continuing high milk supplies are 
a big factor driving high cheese production levels as the year winds to a close. 
If you run a cheese plant, you make cheese. If you also have high milk 
availability at a favorable cost, you make more cheese. That is happening now. 
Manufacturers are very aware that efficiencies of operation favor higher 
production levels if inputs have a favorable cost. There is ample milk this week 
and even more looking forward over the next two holiday weeks when prevailing 
fluid milk retail and school sales patterns are altered for the holiday weeks. 
Something must be done with the milk and cheese continues to be among the most 
profitable uses. Moreover, this season has given some credibility to the concept 
that if cheese is made it will be sold. Manufacturers have come to see that 
concept proven in recent months. Thus, even with high cheese production and some 
storage tightness, cheese is continually being made and even more will be made 
next week. Holiday cheese has been shipped so current production is focused on 
some weeks or months ahead. Where there is some variation, is in what types of 
cheese are being made. Mozzarella is subject to shorter storage limits for 
customers who want fresh mozzarella so production is more tightly calibrated with 
sales. Some plants shift focus between varieties and specialty cheeses. Harder 
varieties with longer storage expected, continue to be made with less concern. 
While barrels are generally long, many plants making barrels are not able to 
divert milk into block type cheese, so barrel production continues at a good 
pace. There has been some buyer interest in having contracts for 2016 production 
finalized. The DMN National Retail Report-Dairy shows that December 11-17 Midwest 
ads for 8 ounce shredded cheese have a weighted average advertised price of 
$1.59, 61 cents lower than the national average. Midwest prices range from $0.99 
- $1.99. One year ago the national price was $2.45. For 8 ounce blocks, the 
Midwest average price is $1.31, 98 cents lower than the national average price. 
Midwest ads are priced from $0.99 to $1.99. Last year, the national price was 
$2.62. In CME Group trading Wednesday, barrels closed at $ 1.4100, down $.0900 
from last Wednesday and blocks closed at $ 1.4100, down $.0650. 

WISCONSIN WHOLESALE SELLING PRICES:  DELIVERED,                  
DOLLARS PER POUND (1000 - 5000 POUNDS MIXED LOTS)                
                                                                 
Process American 5# Loaf                   : 1.5750-1.9350       
Brick And/Or Muenster 5#                   : 1.8550-2.2800       
Cheddar 40# Block                          : 1.5825-1.9775       
Monterey Jack 10#                          : 1.8300-2.0350       
Blue 5#                                    : 2.1225-3.1100       
Mozzarella 5 - 6# (Low Moisture, Part Skim): 1.6550-2.5950       
Grade A Swiss Cuts 6 - 9#                  : 2.7275-2.8450       


1300C eric.graf@ams.usda.gov  608-557-7005
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