Cheese Sales Are Slowing Down
Published: Friday, November 27, 2020
The following is from Lee Mielke, author of a dairy market column known as "Mielke Market Weekly."
Midwest cheese producers continue to report COVID-related staffing concerns, reports Dairy Market News, though production is running steadily. Milk availability is growing and cheesemakers are reporting notably lower spot milk prices.
There was some interest on the cheese buyer side last week, as customers are returning in light of the price declines, but most reports continue to point to buyer hesitancy. Curd and barrel sales were notably slower, as customers are concerned about more public restrictions due to the pandemic. Cheese customers do not want extra inventory at the end of the year, says DMN.
Western cheese buyers are seeing more offers for cheese as prices sink. Contacts think markets shifted from active demand to oversupply in a relatively short amount of time and manufacturers and brokers are trying to clear stocks so they don't lose value. Buyers are not interested unless prices are at lower levels. The challenge for both buyers and sellers is that demand for cheese is lagging. Retail demand is ahead of last year, but food service sales are weak, government purchases are less than previous rounds, and higher prices have stagnated export opportunities. But cheese production is steady in the West.
Spot butter saw a last Friday finish at $1.3450 per pound, down 5.50 cents on the week and 68 cents below a year ago, with 21 cars trading hands on the week.
Central butter producers report mixed tones on cream availability. Some say offers were generally quiet, others are still receiving cream if they choose to take it. Expectations are pointing to more cream becoming available into early 2021. Food service is not expected to be where it has been in previous years. Retail buying increases have helped allay some of the food service loss, but market prices are and have been strained in 2020 compared to previous years.
Cream supplies have been adequate for steady butter production in the West. A surge is anticipated Thanksgiving Week as some operations take time off. Orders remain strong for most print accounts as prices edge lower. Recent lockdowns, due to advancing pandemic concerns, are stimulating retail sales. Manufacturers continue to pull heavily on stored butter to meet the strong yearend orders.
Grade A nonfat dry milk closed at $1.0850 per pound, down a quarter-cent on the week and 13.50 cents below a year ago, with 29 sales reported for the week.
The dry whey fell to 42 cents per pound last Wednesday but closed last Friday at 43.75 cents, up .75 cents on the week and 9 cents above a year ago on two sales.
U.S. dairy product commercial disappearance looked favorable in September. The USDA's latest data shows total cheese disappearance at 1.14 billion pounds, up 3 percent from September 2019, but year to date is down .2 percent. American-type cheese was up 10.2 percent from a year ago and mirrored year to date numbers.
Butter, at 188.8 million pounds, was up 12.2%, following two consecutive months of declines, according to HighGround Dairy, and is up 2.9 percent year-to-date. Nonfat and skim milk powder totaled 235.8 million pounds, up 20.3 percent from 2019 and up 1.2 percent year to date, supported by good domestic demand according to HGD.
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