MD_DA840 DA MD DA840 Cheese - West MADISON, WI. July 6, 2016 (REPORT 27) WEST CHEESE Milk in the West region remains plentiful, keeping the production of cheese stable and strong. The current cheese level in cold storage continues to be heavy. Inventories are mixed. Some manufacturers lowered stocks when market prices were lower. However, available storage space for additional cheese is becoming harder to find. Older commodity cheese is becoming more difficult to move, especially with the growing inventory. Processors are looking to blend younger cheese with older cheese. With current inventory numbers, producers look to slow down production where possible. Although storage space continues to be difficult to find, the decent demand for fresh commodity cheese from buyers is making it economically feasible to keep production stable. There is good domestic demand for readily consumable cheese. Prices have increased heading into the third quarter, and some producers are assuming the domestic demand will hold and carry on into the fall season. Foreign inquiries are weak as the value of the U.S. dollar grows, making cheese exports less attractive. The DMN National Retail Report-Dairy for the week of July 1-7 shows the U.S. weighted average advertised retail price for an 8 ounce pack of natural shredded cheese is $2.16, down $.08 from last week, and down $.29 from a year ago. Packs average $2.30 in the Southwest and $2.28 in the Northwest. For 8 ounce blocks, the U.S. price is $2.23, down $.02 from last week, and down $.22 from a year ago. Blocks average $2.19 in the Southwest and $2.16 in the Northwest this week. In the West, wholesale prices are up $.0875 for process, and up $.0700 for cheddar block, cuts, and Monterey Jack. Swiss cut wholesale prices are down $.0125. Dairy Products (NASS) reports total 2016 U.S. cheese production, year to date through May, is 4.973 billion pounds, 2.2% above 2015. May 2016 U.S. total cheese production, 998.1 million pounds, is 0.7% above April 2016. In the West, total cheese production for May 2016 was 433.0 million pounds, 1.5% more than April. For total cheese production and various types of cheese, May 2016 U.S. and West cheese production percent changes compared to May 2015 are as follows: U.S. West Total Cheese + 1.2% + 0.4% American - 1.9% - 2.4% Cheddar - 2.0% + 0.3% Total Italian + 5.2% + 4.0% Mozzarella + 4.4% + 3.8% Swiss - 4.8% ... The CME Group June 2016 monthly average price for barrels, $1.5301, is up from the May 2016 monthly average of $1.3529, but down from the monthly average of a year ago, $1.6690. Blocks' June average price, $1.5005, is up from the $1.3174 May monthly average, but down from $1.7052 one year ago. In CME Group trading Wednesday, barrels closed at $1.6700, up $.0100 from a week ago and blocks closed at $1.5800, which is unchanged. WHOLESALE SELLING PRICES: DELIVERED, DOLLARS PER POUND (1000 - 5000 POUNDS MIXED LOTS) Process 5# Loaf : 1.7350-1.9925 Cheddar 40# Block : 1.6900-2.1350 Cheddar 10# Cuts : 1.8700-2.0900 Monterey Jack 10# : 1.8800-2.0400 Grade A Swiss Cuts 6 - 9# : 2.5425-2.9725 2016 U.S. Cheese and Curd Exports (USDA-FAS) 2016 Exports % Change From (Million Lb.) 1 Year Ago May Total 52.7 - 19 TOTAL, JAN - MAY 257.7 - 21 1 Mexico 85.1 - 2 2 South Korea 36.1 - 48 3 Japan 27.3 - 28 4 Australia 12.4 - 45 5 Canada 10.5 - 4 1530CT Mike.bandli@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