Block and barrel cheese inched three quarters of a cent higher Monday, putting the blocks at $1.3875 per pound and barrel at $1.38 but that’s a far cry from the $1.80 that New Zealand cheese is reportedly selling. Downes-O’Neill dairy economist Bill Brooks says “either we don’t have product that he folks out there want or New Zealand might have everything filled up already at those price levels.”
Milk production is having problems there, he said, and that’s tightening their market and so far the international markets haven’t gravitated to our more than adequately supplied cheese market here.”
You would think that U.S. cheese would be considered a bargain at current prices and brooks admitted that was so, even with transportation costs, but sometimes U.S. cheese may not meet the quality or quantity that the international markets want. He added that a lot of what’s traded on the international market is a white Cheddar while most U.S. Cheddar is yellow so that takes away some of the market potential.
He says the U.S. is exporting a fair amount of cheese, when you look at the overall spectrum of dairy commodities, the U.S. still isn’t geared for that market yet and he’s not sure the U.S. ever will be because we are such a domestic dominated market.
Brooks looks for cheese prices to run “sideways” for a while. Price have traded in the $1.30s to the low $1.50s and are currently in the mid $1.30s and have been since mid April. He doesn’t see that changing until we get through the flush and warmer weather. Mid-summer we may start to see steady gains, he said, but he doesn’t expect the run up to levels seen in 2007 and 2008 for some time.