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CME Cheese Prices Surge As U.S., Global Demand Heats Up

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Volume 37 August 4, 2017 Number 29 CME cheese prices surge as Like us on Facebook and follow us on Twitter! U.S., global demand heats up A By Alyssa Mitchell beginning to close. season. School is about to head volatility in recent weeks, swing- “I think we’re working back into session, so milk to ing from $2.58 per pound to as INSIDE MADISON, Wis. — Dairy spot ourselves in a direction to get manufacturing should slow, high as $2.7375 on Thursday. market activity at the Chicago the spread in line, and as milk and with college back in ses- Butter settled at $2.73 today. ✦ WCMA Update: ‘A strategic Mercantile Exchange (CME) production ebbs seasonally, sion, pizza sales should season- Andrew Faulman, floor plan for U.S. dairy.’ was anything but dull this week. we’ll see that spread tighten,” ally increase,” Dorland says. manager at Rice Dairy LLC, Cheddar barrels surged to a says Eric Meyer, president of Dave Kurzawski, senior Chicago, says butter’s $2.70 For details, see page 4. two-month high of $1.555 per HighGround Dairy, Chicago. broker with INTL FCStone, price level seems to have ✦ Industry outlines priorities pound last Friday and increased USDA’s Dairy Market News Chicago, says one of the key generated trade in the futures at USTR roundtable. another 11.5 cents Tuesday to says cheese producers in the stories for cheese demand in and options space as well as $1.66. Following the move up, Midwest are reporting that 2017 is the “war” going on at the spot market. For details, see page 5. barrel prices then backed off milk supplies are still avail- the retail level, with the dairy “Futures are pointing to ✦ Vince Razionale named to settle at $1.53 today. able, but noticeably lower case on the front lines. us maintaining spot north of 2017 recipient of Daphne Cheddar blocks also have than this time last month. “Competition has been $2.70,” he says. “When you Zepos Teaching Award. surged in the past month, mov- Foodservice orders are grow- going from tough to intensely head east across the pond, ing from the low-$1.50s at the ing for specialty/traditional fi erce as traditional grocers we’re seeing prices in the low For details, see page 28. beginning of July to the $1.70s cheesemakers. battle with online and new $3 realm. The demand for fat ✦ Blue cheeses take top in the past couple of weeks. “Pizza cheese producers discount competitors,” he around the world has grown, honors at International Blocks settled at $1.6975 today. report sales are meeting says, noting the pressure is particularly in the EU. I be- Cheese Awards. Analysts note a long-term seasonal expectations,” Dairy forcing existing companies lieve this is lending support to fairly large price spread be- Market News says. “Curd pro- to reevaluate their pricing in our market even at the $2.70 For details, see page 32. tween blocks and barrels is ducers are still experiencing dairy, causing price pressure price level.” a seasonal push as state fairs in many categories. Dairy Market News says are beginning this week in Kurzawski also notes the some market participants Midwestern states.” line of sellers at the CME has consider the possibility of a Tarentaise Reserve wins its Sara Dorland, managing dwindled in recent weeks, $3 CME butter cash price by partner at Ceres Dairy Risk while the line of buyers has the early fall. second title at ACS contest Management, Seattle, says improved. Meanwhile, excessive in- stronger U.S. cheese exports “There is solid demand for ventories have been keeping a DENVER — Tarentaise Reserve, made by the Spring Brook Farm Team also could be helping to re- processed solids both domes- lid on the spot nonfat dry milk at Farms for City Kids Foundation/Spring Brook Farm, Reading, Ver- balance the domestic supply/ tically and abroad, and the (NDM) price for the better mont, was named Best of Show in this year’s American Cheese Society demand situation. In addition, environment has improved part of the year, Faulman says. (ACS) Judging and Competition. This was the second time Tarentaise last month’s “Cold Storage” for exports with the U.S. dol- “While we have seen ex- Reserve won the ACS Best of Show Award. The cheese also received report from USDA had a July lar continuing to lose ground ports pick up to places like the top ACS award during its 2014 competition. stocks revision that helped to against other major dairy Mexico and China, it has only “We’re delighted — it’s a great honor,” says Jeremy Stephenson, improve cheese commercial exporters,” he says. been enough to keep prices cheese program director, Spring Brook Farm. “I’m very happy for my disappearance fi gures. CME butter, while still at a supported in the mid-$0.80s,” team, which starts with the dairy farmers and goes right through to “It’s summer and grilling high price, is experiencing more Turn to PRICES, page 15 a the folks in packing and shipping, retailers and distributors.” Stephenson adds that it’s important to mention that this Alpine- style cheese, made from Jersey cow’s milk and aged for two years or more, is made as part of the nonprofi t Farms for City Kids Foundation that gives students a chance to experience a dairy farm and the chee- U.S. cheese production up IDFA-ordered tool semaking process up close. quantifi es dairy’s “We suit them up and then come into the aging room and experience 3.2 percent from year ago economic impact how that smells like,” he explains. “We let them, if we have time, pick WASHINGTON — Total U.S. cheese production, excluding cottage up the wheels, turn them and wash one or two wheels. Beforehand cheese, was 1.03 billion pounds in June, 3.2 percent above June WASHINGTON — A new in- we do some tabletop work to see how milk coagulates when you add 2016’s 997.5 million pounds, according to data released Thursday teractive economic impact enzymes and rennet to get a sense of what actually happens at the vat.” by USDA’s National Agricultural Statistics Service (NASS). (All tool commissioned by the Second place overall at the ACS contest went to St. Malachi made fi gures are rounded. Please see CMN’s Dairy Production chart International Dairy Foods by Matt Hettlinger and Samuel Kennedy of The Farm at Doe Run, on page 31.) Association (IDFA) shows Coatesville, Pennsylvania. In third place overall was Harbison made June cheese production was 2.5 percent below May 2017’s 1.06 the economic stimulus pro- by Mateo Kehler, Cellars at Jasper Hill, Greensboro Bend, Vermont. billion pounds, but when adjusted for the length of the months, vided nationally and locally Judging took place during last week’s ACS annual conference in June cheese production was 0.8 percent higher than May produc- by dairy foods companies Denver. This year’s competition was the largest ever, with 2,024 entries tion on an average daily basis. and their suppliers. from 281 companies across the United States as well as from Canada, Italian-type cheese production totaled 448.9 million pounds in IDFA engaged John Mexico and Colombia. June, 3.1 percent above production a year earlier. Production of Dunham and Associates, a “Artisan cheese is clearly on a growth curve in both quality and Mozzarella, the most-produced Italian-type cheese, totaled 349.5 leading economic research diversity. We are thrilled by the record number of entries in this year’s million pounds, also up 3.1 percent from a year earlier. fi rm, for the study, “2017 a Turn to ACS, page 17 Turn to NASS, page 31 a Turn to IMPACT, page 14 a © 2017 CHEESE MARKET NEWS® — This is Cheese Market News’ E-subscription and may not be forwarded to anyone other than the intended paid subscriber without the express permission of Cheese Market News (For more information, contact [email protected]) 2 CHEESE MARKET NEWS® — August 4, 2017 MARKET INDICATORS Chicago Mercantile Exchange for the week ending August 3, 2017 Cash prices for the week ended August 4, 2017 CHEESE FUTURES* (Listings for each day by month, settling price and open interest) Monday Tuesday Wednesday Thursday Friday July 31 Aug. 1 Aug. 2 Aug. 3 Aug. 4 Fri., July 28 Mon., July 31 Tues., Aug. 1 Wed., Aug. 2 Thurs., Aug. 3 JUL17 1.546 3,977 1.546 3,976 1.547 3,976 1.543 4,599 -- -- Cheese Barrels AUG17 1.669 3,570 1.669 3,561 1.688 3,456 1.663 3,465 1.651 3,543 Price $1.5450 $1.6600 $1.5900 $1.5400 $1.5300 SEP17 1.744 2,949 1.754 2,943 1.774 2,949 1.738 2,922 1.713 2,927 Change -1 +11 1/2 -7 -5 -1 OCT17 1.755 2,321 1.760 2,325 1.779 2,349 1.744 2,356 1.736 2,391 NOV17 1.759 2,582 1.766 2,575 1.772 2,561 1.748 2,554 1.738 2,557 Cheese 40-lb. Blocks DEC17 1.739 2,435 1.741 2,438 1.745 2,425 1.727 2,397 1.728 2,394 Price $1.7550 $1.7875 $1.7400 $1.7300 $1.6975 JAN18 1.711 885 1.712 885 1.712 890 1.705 896 1.705 893 FEB18 1.711 758 1.711 768 1.716 785 1.705 785 1.705 792 Change NC +3 1/4 -4 3/4 -1 -3 1/4 MAR18 1.710 709 1.710 719 1.712 737 1.706 737 1.706 739 APR18 1.709 628 1.709 638 1.709 656 1.702 662 1.702 664 Weekly average (July 31-Aug.
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