Cheese Demand Remains Strong

(May 22, 2012) The April milk production report was better than expected with the rate of growth year-over-year at 3.3%. Cow numbers remain up, but milk production growth was not as strong compared to the last few months.

“We had record exports in the month of March for cheese as well as total dairy product exports,” Stewart Peterson’s Matt Mattke reported.  “Commercial disappearance through February did well and we are moving a lot of cheese on a weekly basis.”

Lately, the brunt of the weekly sales has been between 20 to 23 million pounds, which is really good, according to Mattke.

“The demand side of the equation is definitely doing well,” he said. “Over the last 25-30 weeks… we have had the strongest period of cheese sales since 2010.”

Despite demand, dairy producers are still battling high feed costs and it’s the supply side that is creating an overhang on prices and keeping them limited.

”We are going to need to see some indications here that supplies has hit a seasonal peak before we are likely to get a ton of additional upside” he concluded.