News

Cheese prices plummet to near-support levels

February 16, 2006

LOUISVILLE, Ky.—Unseasonably mild weather throughout the United States has milk production soaring and cheese prices plummeting.

Block cheddar traded at the Chicago Mercantile Exchange dipped nearly 4 cents on Feb. 17 to close at $1.165 per pound, just 2.5 cents above government support levels. One year ago, blocks traded at $1.43.

According to Dairy & Food Market Analyst newsletter editor Jerry Dryer, dairymen are calling the booming milk supply "a spring flush in January." Typically, milder spring weather makes cows more comfortable and results in a corresponding boost in supply. But 2006's mild weather spurred production far sooner than expected.

With two "sell" offers remaining on the CME board, it's likely prices will fall even further when trading resumes on Feb. 21. The CME will observe the Presidents' Day holiday on the 20th.

Read more in our Cheese Market Analysis Research Center.