CHICAGO -- The price of 40-pound blocks of cheddar cheese jumped 9 cents in just two days of trading (Sept. 16-17) on the Chicago Mercantile Exchange. At $1.21 per pound, the increase marked the sharpest spike in more than three months and the highest price paid for blocks since May 7, when it sold for $1.22 per pound.
The price increases may not hold on for long, however, if demand doesn't rise accordingly, said dairy market analyst Jerry Dryer. Since late winter, weak cheese demand and strong milk production have forced cheese prices to trade at just above a dollar per pound.
According to a report on Dairyline.com, Dryer said that in the second week of September, cheese prices sold below government support levels. When the same occurred during a week in July, prices took nearly a month to rebound.
Still, Dryer said cheese prices could strengthen some 10 to 15 cents per pound by mid-October if some large users move to build inventories in preparation for the holiday season. That, he said, would "give cooperatives a chance to run the trading prices higher at the Chicago Mercantile Exchange."