Cheese Market Update


This  is from the Bellissimo Market Report Cheese Market Update.

Some insights into the rising cheese prices:


  • Farmer's cut back milk supplies (as required by co-ops and other milk buyers) in April after foodservice demand dried up and prices crashed. Even if supply constraint requirements have ended, milk supplies will take time to recover.

  • Responding to the low cheese prices in April, stronger Export sales were booked, clearing cheese from the US marketplace. Some wrote export deals that will be delivered over coming months and will continue to reduce available supply for the US market.


  • ​With restaurants starting to reopen for dine-in as well as improving their take-out and delivery operations, foodservice operators and distributors are restocking inventories that were drawn down in April and early May.

  • Retail cheese (and other dairy product) demand continues to be very strong.

  • USDA's Farmers to Families Food Box Program contractors are purchasing $317 million in Dairy products for 6 weeks (ending June 30th) vs. an earlier plan of $100 million per month. The US Government announced it may purchase up to an additional $120 million in dairy products for food aid through another program (Section 32), as well. They have also been actively buying through two other programs with very short delivery timeframes.

 It is very difficult to forecast the duration of the price spike since we don't have full visibility to several key factors:

  • Milk supply shifts: Some farm practices to reduce production are more permanent than others. 

  • Export data lags: Commitments for future delivery are not public so we won't know what volumes were committed for future delivery during the price dip.

  • The market is signalling a short-term mismatch between supply and (overheated) demand.

  • If there are no other big shocks to the marketplace in the meantime, the shorter-term nature of the government purchases, decreasing consumer purchasing power and an expected slowdown in export sales (at these prices) should pull cheese prices back down by late June into July.


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