MD_DA840 DA MD DA840 Cheese - West MADISON, WI. February 08, 2017 (REPORT 6) WEST CHEESE Western cheese makers report cheese production is active and there is plenty of milk available to processors. Some industry contacts suggest demand is caught in a post-Super Bowl lull. Although cheese demand from food service and cut and wrap buyers has eased back a little, manufacturers say domestic cheese block demand is good. There is some interest from export markets. However, because U.S. cheese prices are still slightly higher than cheese prices in other parts of the world, exports have yet to fully develop for many U.S. cheese manufacturers. Western cheese inventories are steady to growing for blocks, but long for barrels; some industry contacts are perplexed about how the barrel price could be inverted to the block price on the CME. The DMN National Retail Report- Dairy for the week of February 3-9 shows the U.S. weighted average advertised retail price for an 8 ounce pack of natural shredded cheese is $2.23, up $.04 from last week. Packs average $2.40 in the Southwest and $2.18 in the Northwest. One year ago, the national price was $2.18. For 8 ounce blocks, the U.S. price is $2.15 up $.10 from last week. Blocks average $2.13 in the Southwest and $3.24 in the Northwest. One year ago, the national price was $2.07. In the West, wholesale prices are up $.1250 for process, and up $.0950 for cheddar block, cuts, and Monterey Jack. Swiss cut wholesale prices are up $.2150. This week, a cooperative export assistance program accepted 6 requests for export assistance on contracts to sell 557,770 pounds (253 metric tons) of cheese. So far this year, the program has assisted member cooperatives who have contracts to sell 5.0 million pounds of cheese in export markets. Dairy Products (NASS) reports total 2016 U.S. cheese production, year to date through December, is 12.074 billion pounds, 2.0% above January through December 2015. December 2016 U.S. total cheese production, 1.050 billion pounds, is 3.0% above November 2016. In the West, total cheese production for December 2016 was 448.3 million pounds, 5.2% more than last month. For total cheese production and various types of cheese, December 2016 U.S. and West cheese production percent changes compared to December 2015 are as follows: U.S. West Total Cheese + 1.3% + 1.3% American + 3.9% + 4.1% Cheddar + 3.5% + 3.9% Total Italian - 1.1% - 1.0% Mozzarella - 1.2% + 0.1% Swiss - 3.2% ... The CME Group January 2017 monthly average price for barrels, $1.5573, is down from the December 2016 monthly average of $1.6132, but up from the monthly average of a year ago, $1.4842. Blocks' January average price, $1.6866, is down from the $1.7335 December monthly average, but up from $1.4757 one year ago. The average price through the year of 2016 was $1.5562 for barrels and $1.5797 for blocks. In CME Group trading Wednesday, barrels closed at $1.6850, up $.1075 from a week ago and blocks closed at $1.6200, down $.1300. WHOLESALE SELLING PRICES: DELIVERED, DOLLARS PER POUND (1000 - 5000 POUNDS MIXED LOTS) Process 5# Loaf : 1.6700-1.9275 Cheddar 40# Block : 1.8750-2.3200 Cheddar 10# Cuts : 2.0550-2.2750 Monterey Jack 10# : 2.0650-2.2250 Grade A Swiss Cuts 6 - 9# : 2.8875-3.3175 2016 U.S. Cheese and Curd Exports (USDA-FAS) 2016 Exports % Change From (Million Lb.) 1 Year Ago December Total 63.1 + 16 TOTAL, JAN - DEC 632.8 - 9 1 Mexico 198.4 - 1 2 South Korea 93.6 - 25 3 Japan 61.3 - 20 4 Australia 34.3 - 10 5 Canada 29.3 + 1 1530CT Mike.Bandli@ams.usda.gov 605-557-7010 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