USDA to boost cheese prices

Aug. 6, 2009
The U.S. Department of Agriculture is moving to boost the price of milk and cheese in an effort to aid the dairy industry, according to a story in the New York Times. Milk prices are at their lowest level in 30 years and are below operating costs for many farmers.
The government will pay 15 percent more for nonfat dry milk and 16 percent more for cheese between August and October. The move is expected to raise farm revenues by $243 million.
Efforts by the USDA to boost cheese prices are already having an effect. Block cheese on the Chicago Mercantile Exchange closed at $1.29 per pound on Aug. 6, its highest level since March.
Pizzeria operators have been enjoying dramatically lower cheese prices this year compared with 2008. Prices had fallen to as low as $1.10 per pound, off more than 50 percent compared with a May 2008 high of $2.28 per pound.
According to Chicago-based research firm Technomic, pizza accounts for 25 percent of cheese consumption in the United States. And since the two industries are so intertwined, problems in one industry are bound to affect the other.   As part of an effort to boost cheese consumption, the industry trade group Dairy Management Inc. partnered with Domino's to develop the company's line of "American Legends" specialty pizzas, which feature 40 percent more cheese than a typical Domino's pizza.   DMI also is exploring similar opportunities with other pizza chains.   "Pizza sales account for more than $32 billion annually, so we know that increasing pizza sales benefits dairy producers and the dairy industry," said Tom Gallagher, chief executive officer, DMI. "This partnership with Domino's is one step in our effort to increase sales of pizza products containing more cheese."

Topics: Cheese

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