Welcome to Cheese Market News
— Read on www.cheesemarketnews.com/markets/dailymarkets.html
Something unusual is happening in
The USA cheese market that is.
The price Of 40 lb (18 kg) blocks is rising rapidly.
This report shows the price being US $2.0525 per pound. (USD 4.50 per kg) That translates to Australian Dollars – $6.58 per kg !! (Exchange rate USD 0.68 to 1 AUD)
Those are Retail Prices – it was not that long ago and you could buy cheese in Australia in some supermarkets for $6 per kg.
While it is difficult to predict what effect, of any, this price movement in the USA will have in Australia – the laws of supply and demand suggest that cheese exports from the USA will reduce and drive up the international prices.
The USA is not the main driver for Traded cheese, but it’s CWT program helps keep world prices LOW by subsidising exports http://www.cwt.coop/cwt-assists-2-1-million-pounds-dairy-product-export-sales/
Now that USA internal prices are much higher than Export prices (NZ’s Global Dairy Trade (GDT) is quoting USD $3.80 per kg) what will happen to cheese flows? Note the USA milk production is steady, and while farmers are leaving the industry in the USA, production is not dropping. https://ec.europa.eu/agriculture/sites/agriculture/files/market-observatory/milk/pdf/world-raw-milk-production-us-nz-au_en.pdf
Cheese has a lagged response – it is stored for at least 3 months before sale so the effects, if any on the international market will take a while.
What can be said is that the probable effect in Oceania will be positive.
This can be seen in rising cheese prices in Australian Supermarkets.