The announcement helped put a floor under prices, analysts said. Not long after the price of cheese bottomed out in April, the Department of Agriculture announced plans to spend $3 billion to buy food from farmers, including $100 million a month on a variety of dairy products. to buy,” said Brian Fletcher, vice president of commercial services at Rice Dairy, a brokerage consulting firm in Chicago.Īlso helping to steady the market: the government. “We were the most competitive price in the world, and everyone was coming to the U.S. By the middle of that month, exports began to pick up, according to cheese traders, providing domestic makers with a new source of demand, and helping to stabilize prices. In April, with Cheddar at $1 a pound - a level last seen in 2003 - cheese made in the United States was suddenly priced far below foreign competitors. “We got swamped with Cheddar for a time,” said John Umhoefer, the executive director of the Wisconsin Cheese Makers Association. By Tuesday, the price of block Cheddar jumped even higher, to $2.81 a pound. Chicago time, the Chicago Mercantile Exchange operates a 10-minute session in which buyers and sellers - typically large dairy food cooperatives, cheese producers or other companies active in the industry - electronically trade roughly 40,000-pound truckloads of young, mild Cheddar.Ĭheese prices soared to a record high on June 8, when a 40-pound block of Cheddar - the benchmark for cheese, akin to a barrel of West Texas Intermediate in oil markets - touched $2.585 a pound on the CME. Like the price of oil, silver and hogs, cheese prices are set, in part, by traders in commodities markets. Together, these countervailing forces have fueled the up-and-down trading in the market. Dairy farmers and prepared-food companies, which supply ingredients to cheese makers or buy their products, have seen disruptions in their businesses. But the vagaries of supply and demand during the pandemic have caused sharp swings in cheese prices, which rose to record highs this month - just weeks after plummeting to nearly 20-year lows.Ĭonsumers are buying way more cheese, even as the usually huge demand from restaurants and schools has fallen off. The wholesale market for Cheddar is typically a mild one.
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