LYNDEN, Wash. -- U.S. dairy market analyst Jerry Dryer believes excessive cheese inventories soon may push prices below a dollar per pound for a "sustained period of time."
According to a report on Dairyline.com, Dryer, editor of Dairy & Food Market Analyst, said traders tell him some 30 million pounds of cheese must move from inventory to market before prices increase again.
Prices for 40-pound blocks of cheddar cheese made a rare descent below the price for 500-pound barrels on Feb. 21. At the close of trading on Feb. 26, the block price was at $1.01, while barrels held steady at $1.03.
Dryer said the excess cheese must move either to USDA's Commodity Credit Corporation as surplus or overseas via the Dairy Export Incentive Program.
While Dryer predicts continued strong milk production in the U.S. will keep the pressure on prices, he said dairy cattle slaughter rates are increasing.