Two cheddar markets moved in opposite directions over the past month. New Zealand cheddar fell 12.3% at the 7 July GDT event, its lowest since November 2023. US cheddar did the reverse: CME blocks closed at $1.60/lb, up 10.0% on the month and 15.1% above their 22 June low of $1.39, with barrels at $1.6025, up 14.1%.
A record-wide gap, now back to normal
US cheddar is almost always the cheapest of the three big origins. It has held that spot at 64 of the last 72 GDT events, so being the cheap one is not the news. The size of the gap was. Blocks started the year around 75 cents under the New Zealand price, more than double the three-year average and the widest of any month in three years. That gap is now 17 cents, back under its three-year norm. It closed from both ends: US blocks up 19% since January, the New Zealand price down 16%.
The milk is flowing, just not into cheddar
The milk mix tells part of it. Whey values are at records, with WPC80 up 178% in twelve months, and dry whey production rose 12.2% in May, so the milk is going into the vats. Just not into cheddar. US cheddar production has fallen three months running, down 1.2% in May, while mozzarella picked up speed to plus 6.2%. CME blocks price cheddar, not mozzarella.
Demand growth is on the export side. US cheese exports rose 18.8% in May, but it landed in fresh cheese, up 40.1%, the heading that carries the mozzarella stream, rather than cheddar. Domestic disappearance rose 0.65%, and stocks sit slightly below their five-year norm, so nobody is emptying the cold store.
No single driver
No single factor explains the move. Butter held broadly sideways over the month at $1.5875/lb, and NFDM went the other way entirely, down 10.9% to its lowest since early February and 36% below its May peak. Product by product, the full picture is in this week’s US Weekly on Vesper.
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