News

Cheese market dips 22 cents for the week

February 8, 2005

February ushered in a break for pizza operators as block cheese prices fell more than 22 cents during Jan. 31-Feb. 4 trading on the Chicago Mercantile Exchange.

The week's final session closed with blocks falling 4.5 cents to $1.4925.

For an operator who buys 1,000 pounds of cheese a week, those savings would amount to $222.

One offer each for both blocks and 500-pound barrels remained on the board Feb. 4, signaling some excess supply. However, the narrow price difference between blocks and barrels (which closed at $1.47) can indicate a market at the bottom. Some analysts had predicted a short-term bottom of around $1.50, while over the long term, they forecasted prices returning to the $1.60s.

Jerry Dryer isn't one of them. In his weekly newsletter Dairy & Food Market Analyst, he wrote that more surplus cheese is coming to the Merc, which should drive prices further south. That cheese, he believes, is coming from excess that wasn't sold for expected consumption on Super Bowl Sunday.

Read more in our Cheese Market Analysis Research Center.