US cheese prices have climbed to levels where international competitiveness is becoming a challenge, while European cheese is being offered at very competitive prices on global markets.
The current price gap between regions is substantial. US cheddar trades at $1.78 per pound following a rise in CME blocks this week, with 32 loads changing hands. European cheddar sits at $1.80 per pound. For mozzarella, US prices stand at $1.84 per pound compared to Europe’s $1.51 per pound.
At these price levels, international competitiveness is becoming a challenge for American cheese. European cheese is being offered at very competitive prices, which opens up more export opportunities for European producers.
The American market is experiencing a shift in domestic demand. Consumer demand continues moving toward retail rather than foodservice as the average consumer is choosing not to eat out as much due to higher prices.
European cheese markets have stabilized after several weeks of sharp declines. The most immediate pressure on sellers has eased, though plenty of manufacturers and traders still have cheese to sell. Some older volumes are trading below current spot price levels.
Buyer activity shows different patterns across timeframes. Several buyers are actively looking to secure November and December volumes, with only around six weeks of normal operations remaining before year-end. Demand is also present for Q1 purchasing, with buyers trying to secure Q1 volumes at Q4 levels while sellers ask for a premium compared to spot prices.
US mozzarella is now much more expensive than European mozzarella. European mozzarella markets have stabilized after a couple of very weak weeks where prices dipped early last week.
The lack of export competitiveness is expected to weigh on US prices later on, creating likely competition between Europe and the US.
Full analysis of dairy market fundamentals and price forecasts is available on the Vesper platform.