Two weeks ago European cheese prices were slowly melting away, and that slide has now paused. The Gouda market and Mozzarella are holding fairly stable, Cheddar prices are still firm compared to the rest, and Emmental is following along. That makes cheese the odd one out in a dairy week where the butter market kept moving down, the SMP market found new highs and WPC fell sharply.
Producers are making more cheese than ever, and so far it is being absorbed without much trouble. Cheese markets have to balance lower milk fat prices, higher milk protein prices, sharply adjusting whey markets, very high production, higher exports and good consumption, and for now the result feels rather stable.
The US moves faster
The exception is the US. CME spot Cheddar blocks rallied to $1.53 a pound on 14 October, up from $1.27 two weeks earlier, as some additional demand appeared at the lower price levels. That happened against a well-supplied backdrop. US cheese stocks climbed counter-seasonally in August to 1.44 billion pounds, 2.3% above a year earlier, and US plants are keeping their vats full to benefit from high whey prices.
The rally has narrowed the transatlantic gap. US Cheddar now trades roughly $840/mt below European product, down from about $1,400/mt two weeks ago, though EU Cheddar remains largely priced out of export markets. US Mozzarella supply is far from tight, and it still trades roughly $670/mt below European product.
Holding, for now
In Europe, Gouda has stabilized at the level where buyers are willing to step in for October and November, though few deals are bridging the gap between bids and offers. Mozzarella has picked up slightly, which is a surprise with plants still running well and the expected fourth-quarter cut in output yet to happen. Vesper’s analysis expects prices to stay mostly stable in the coming weeks, with the risk for some cheeses tied to how quiet first-quarter demand turns out to be. The full analysis has the outlook for each variety.
