MD_DA830 DA MD DA830 Cheese - Midwest MADISON, WI. January 27, 2016 (REPORT 4) MIDWEST CHEESE: The impact on cheese sales increases attributed to the Super Bowl is a discussion topic which seems to have stretched over several months. In reality most orders for retail or food service/frozen pizza cheese that will be consumed before or during the event have been filled. Cheese manufacturers are now looking forward into spring. Current Midwest milk supplies used for cheese are less impacted by extra spot milk this week than several weeks ago, but there are pockets where this remains a factor. Some milk from the East has been shopped around eastern portions of the Midwest. In western regions of the Midwest, milk used for manufacturing cheese is primarily from regular milk supplies. Some Midwest cheese manufactured for sales to eastern customers was not sold/shipped as a result of the substantial snowstorms over the weekend. This resulted in some increase in manufacturer inventories. Many manufacturers are now focused on fundamentals of supply looking forward. Strong domestic milk production seems to be a likely reality in coming months. Midwest weather quickly bounced back from a cold spell and now looks to remain mild in coming weeks, which will keep the milk flowing. The same is true in the EU. The outcome will be continuing strong cheese production on both continents. That will also maintain greater competition in cheese export markets. Growing inventories are a resulting reality more manufacturers expect to have to deal with. The two most significant questions are whether domestic cheese demand will remain strong; and whether expanded cheese exports will materialize in a world with much cheese export competition. Cheese pricing may be under pressure in coming months depending on these variables. The DMN National Retail Report-Dairy shows that January 22-28 Midwest ads for 8 ounce shred cheese have a weighted average advertised price of $2.23, 16 cents lower than the national average. Midwest prices range from $1.77-$2.99. One year ago, the national price was $2.56. For 8 ounce blocks, the Midwest average price is $1.96, 37 cents below the national average price. Midwest ads are priced from $1.77-$2.50. Last year, the national price was $2.50. Midwestern wholesale prices are unchanged for Swiss cuts, but down $.0475 for process and down $.0100 for all other types. NASS reports that December 31, 2015 East North Central region (Wisconsin, Illinois, Michigan, Indiana and Ohio) American cheese stocks were 123% of December 31, 2014, and 102% of November 30, 2015. East North Central region other cheese stocks were 115% of December 31, 2014, but 99% of November 30, 2015. Total U.S. natural cheese stocks on December 31, 2015, 1.146 billion pounds, were 113% of December 31, 2014 and even with November 30, 2015. In CME Group trading Wednesday, barrels closed at $1.4300, down $.0650 from last Wednesday and blocks closed at $1.4600, down $.0200. 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# : 2.6875-2.8050 1300CT 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