News

Bottom drops out of block cheese market

October 3, 2005

LOUISVILLE, Ky. — The price of block cheese took an 11-cent dive in Oct. 4 trading on the Chicago Mercantile Exchange. A day before, blocks declined more than 4 cents.

The wide disparity between prices for 40-pound blocks and 500-pound barrels left traders expecting a price drop for several days. The typical cost gap between barrels and blocks is 3 cents, but the difference was nearly 16 cents as of Sept. 30. By the end of the session, blocks changed hands at $1.44 per pound, while barrels came in at $1.41.

The fact that no barrels traded and 21 offers went unmet during the session could point to further price drops.

Blocks prices could hold steady, however, as eight trades were made and two offers were left on the board.

In recent weeks, analysts have reported soft demand for barrels, but steadier demand for blocks.

One year ago blocks traded at $1.58.