The cheese market is feeling weaker again, with decreasing prices for all commodity cheeses. The lower prices are mainly due to a weaker demand from buyers, which is pushed by high retail prices. Although additional exports could help relieve stock pressure, we have not heard any big increases in export sales. Nothing more is left for Q3 than a couple of spot purchases now and then, as last month’s purchasing spree meant that Q3 coverage is done. While some trades are going on for Q4, Q3 is very quiet.

Based on Vesper’s price index as of July 12, 2023, the prices for various types of cheese have decreased to the following: Cheddar now costs €3855 | $4135/mt ($1.88/lb) EXW, Emmental costs €4280 | $4591/mt ($2.08/lb) EXW, Gouda costs €3300 | $3539/mt ($1.61/lb) EXW, and Mozarella costs €3250 | $3486/mt ($1.58/lb) EXW.

On the producing side, cheese manufacturers are still running busy schedules, mainly due to relatively high valorisation and reluctance to keep producing butter and milk powders due to the already high availability. This does not mean manufacturers’ warehouses are overloaded with cheese stocks, but they are looking to fill themselves over the following months if buyers are not found. Another option is to sell the milk instead of processing it into cheese, which we’ve heard is being done already.

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For cheese producers, it is a matter of preventing stocks from becoming burdensome and keep finding outlets to keep prices from falling. At the same time, the very few buyers left for August and September are currently placing very low bids, as they might be able to score some great deals. It looks like the market will continue to be a bearish market in the short term.

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