Cheese prices dropping as weather warms

March 19, 2002

The price of block cheese dropped 5.5 percent on the Chicago Mercantile Exchange to $1.29 a pound on Jan. 29 as concerns of a milk glut circulated throughout the dairy industry.

Dairy analysts say that the unusually warm weather -- 50 to 60 degrees in northern states where average January highs typically are in the 30s -- has trigged an early "spring flush," when milk cow output rises with the arrival of spring.

"Cows don't use calendars, so they don't know it's not April or May in much of the country," said analyst Jerry Dryer, during his Jan. 29 Webcast report on "In cow time, it's April. ... There's already cream everywhere. Three big manufactures told me last week that they had tankers of cream sitting in their yards, waiting to be unloaded."

Dryer said the unexpected boom in milk output hasn't resulted in distressed pricing yet, but that it could very soon.

Regarding cheese production, Dryer said he's optimistic that consumption will keep pace with extra production.

"I think we'll see some weaknesses in prices in the short term, although probably not a great deal," said Dryer, whose report was Webcast before the market's close.

On Jan. 29 the price fell 5 cents, following a 4 cent drop the day before. After holding below $1.30 for nearly a month, the price crept up to $1.39 through mid-January, before dropping again Jan. 25.

Topics: Cheese

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