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Market Outlook - Cheese - Butter

(09/02/2022)

Cheese and Butter Market Update

September 2, 2022

CHEESE HIGHLIGHTS

Weekly average CME cheese pricing decreased slightly for the week ending 9/2/2022 to $1.7380 for blocks
and $1.8375 on barrel. The inverted price delta with barrel being valued that much
higher than block bears watching. Once we see the next storage report, we may get some insight.  
Exports are continuing to support US pricing and we have seemed to find a pretty tight range for the time being.  

Recently, pricing has stabilized lower at a more palatable level. With seasonal school demand
kicking off and with record export demand, don't expect any further deflation in market pricing in the near term.  

Milk is available for cheesemakers throughout the country, despite declining output. Some
cheesemakers in the Northeast and West say they are running active schedules, though labor
shortages are causing them to run below capacity.

Demand for cheese in retail and food service markets is, reportedly, softening
in both the Northeast and West regions. Meanwhile, prices below $2
in the Midwest have contributed to an uptick in demand.

BUTTER HIGHLIGHTS

CME butter markets reached an all time high reaching a week ending $3.0760 up $0.04 from
the previous week.Exports are continuing to support U.S. pricing. However, there is now some
weakness within international pricing that has potential to provide some relief in the coming
weeks if domestic demand doesn't improve.

In the Northeast, cream inventories are tight and Class IV multiples are rising.

Contacts in the Central
region relay that cream is available in the region
and they are also
able to purchase from sellers in the West.

Volumes of cream are available in some parts of the West, though overall supplies are
tightening in the region.

Source: USDA Dairy Market News, Cheese Reporter CME Butter and Cheese