Cheese and Dairy Markets

10/26/21

Highlights

BUTTER: The weekly average for Grade AA increased +.0315/lb.

CHEESE: The weekly average for blocks decreased -.0210/lb.

Following a fire at an Idaho butter plant last week, cream has been dispersed among other plants in the Pacific Northwest and northern mountain states region. Throughout the rest of the western region cream supplies are, reportedly, near normal seasonal volumes. Production of butter is steady throughout most of the region. Some producers are reporting labor issues that are causing plants to run truncated schedules. Butter demand is strong with contacts reporting some early purchasing from buyers in anticipation of heavy holiday sales. Stakeholders say that butter is abundant and available to meet near term market needs. The aforementioned butter plant fire has caused some uncertainties around immediate fresh butter availability, leading to an uptick in spot butter pricing. Bulk butter overages shifted up this week and range from 4.0 to 9.0 cents over the CME market price.

Demand for cheese, in both retail and food service sectors, is steady to higher across the West. Holiday cheese demand is picking up, and export interests are steady. Production is mixed throughout the region. Some cheesemakers are operating at maximum capacity, but others report limitations due to persistent staffing issues. Some plant managers are reportedly focusing on making white cheese blocks to drive production of lucrative high protein whey concentrates. Cheese inventories are available for spot purchasing, with blocks more widely available than barrels currently. Congestion at ports and trucking issues continue to pose challenges to transportation. Since June, cheese block prices have been higher than barrel prices on the CME, but that trend inverted this week. Some contacts suggest that this switch is due to the higher production and availability of cheese blocks.