MD_DA830                                                         
DA                                                               
MD DA830 Cheese - Midwest                                        

MADISON, WI.  March 09, 2016 (REPORT 10)                         

MIDWEST CHEESE:    

Cheese manufacturers are voicing concern about increasing cheese inventories yet 
acknowledge that CME Group cheese pricing has remained in the recent range. Most cheese 
plants have contracted milk arriving every day, so cheese continues to be made. Sales are 
stable and sales volume is still pretty good. The challenge in the overall mix is the 
strong volumes of milk produced during a relatively mild winter and into early spring. 
The near term looks like the present, with hopes that domestic customers will continue 
buying cheese. However, there will be a point that cheese storage is essentially full 
unless one of three eventualities, or some combination, occurs: milk flows decline so 
less cheese is made; domestic consumption increases further; or export sales increase. 
The DMN National Retail Report-Dairy shows that March 4-10 Midwest ads for 8 ounce shred 
cheese have a weighted average advertised price of $2.03, 25 cents lower than the 
national average. Midwest prices range from $1.67-$2.50. One year ago, the national price 
was $2.67. For 8 ounce blocks, the Midwest average price is $1.99, 30 cents below the 
national average price. Midwest ads are priced from $1.99-$2.00. Last year, the national 
price was $2.33. Looking at organic cheese, organic 8 ounce shred cheese has a national 
weighted average advertised price of $3.73, 31 cents above one week ago. One year ago the 
price was $3.99. Organic 8 ounce block cheese has a national weighted average advertised 
price of $4.49, 16 cents above one week ago. One year ago the price was $3.99. Dairy 
Products (NASS) reports January 2016 U.S. total cheese production, 1 billion pounds, was 
2.6% more than a year ago, but is 2.6% below December last year. In Wisconsin, the 
highest producing cheese state, cheese production for January 2016 compared with January 
2015 was: total cheese, +4.0%; American, +4.6%; cheddar, +3.3%; total Italian, +4.3%; and 
mozzarella, +4.7%. In each of the categories, the states' percentage increase in 
production exceeded the national percentage. The CME Group February 2016 monthly average 
price for barrels, $1.4573, compares with $1.4849 for February last year. The February 
2016 price for blocks, $1.4744, compares with $1.5382 in February last year. Midwestern 
wholesale prices down $0.0975 for Swiss cuts, up $0.0075 for process, and up $.0150 for 
all other types. This week, a cooperative export assistance program accepted requests for 
1.581 million pounds of cheese. So far this year, the program has accepted requests to 
sell 9.815 million pounds of cheese. In CME Group trading Wednesday, barrels closed at 
$1.4650, up $.0375 from last Wednesday and blocks closed at $1.5100, up $.0600. 
                                                                                                            
WISCONSIN WHOLESALE SELLING PRICES:  DELIVERED,                  
DOLLARS PER POUND (1000 - 5000 POUNDS MIXED LOTS)                
                                                                 
Process American 5# Loaf                   : 1.5400-1.9000       
Brick And/Or Muenster 5#                   : 1.8525-2.2775       
Cheddar 40# Block                          : 1.5800-1.9750       
Monterey Jack 10#                          : 1.8275-2.0325       
Blue 5#                                    : 2.1200-3.1075       
Mozzarella 5 - 6# (Low Moisture, Part Skim): 1.6525-2.5925       
Grade A Swiss Cuts 6 - 9#                  : 2.5725-2.6900       
 
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