Mozzarella at a slight discount, Cheddar at a slight premium, and the usual spreads back between one cheese and the next. European cheese markets look ordinary again, with one exception: cheese from the United States is trading far enough below everyone else to keep its exports moving.
Europe itself has gone quieter over the past two weeks. The number of offers has fallen as buyers take a small step back. Business has been done at firmer levels recently, but there is no great incentive to lock in the rest of the year at those levels, and there is too much uncertainty around milk intake for sellers to start offering at a discount today.
The varieties are all showing different sides of the same market. Cheddar offers have tightened further as milk output in Ireland and the UK slowed, and buyers still have volume left to cover, though EU Cheddar has now priced itself out of the export market entirely. Gouda has steadied after a run driven by slower production, the usual winter demand pickup and a tighter liquid milk market, and now sits back at its normal spread against butter, powders and the other cheeses. Emmental has held flat, with volume still around from earlier in the year when spot milk was cheap, and its discount to other cheese types has disappeared again. Mozzarella has lost the premium it carried through the summer as European demand cooled and more producers raised output to chase it.
The United States has no such uncertainty about milk. New production capacity is being filled with Mozzarella, which pushes out volumes that have to be sold somewhere, and US consumers do not eat enough of it to absorb the lot. Exports are therefore the release valve, and US cheese is priced well below EU and even New Zealand product to keep them flowing. CME spot call cheese blocks fell to $1.43 per pound through this week. Some US producers have raised output further in the hope that the extra export business clears the excess before prices fall again.
Cheddar stays a market of two speeds from here. Europe is firm and could tighten further if milk output disappoints again, while the US sits in serious oversupply. New Zealand only turned bullish after this week’s GDT event. The wider that transatlantic gap grows, the harder it becomes for EU Cheddar to compete for export business, and Vesper’s cheese analysis sets out how far that is likely to run through the rest of the year.
