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Dairy watchers predict cheese prices will stay high awhile

August 14, 2003

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LYNDEN, Wash. -- Will cheese prices -- which have held at $1.60 per pound for 11 trading days -- go up or down when they move next?

That's the question dairy analyst Jerry Dryer posed to his contacts recently. And according to Dairyline.com, 70 percent believe the current price will last three months before plummeting to the high teens or low $1.20s. (See related story CHEESE MARKET ANALYSIS: Cheese prices will retreat -- but when?)

Thirty percent believe the block price will remain above $1.50 until at least year's end and possibly roll into the first quarter of 2004.

Dryer believes the block price -- if it sinks at all -- won't go below $1.50 anytime soon because Class III milk prices should remain strong (above $13/cwt) for at least six months.

"Demand will remain at or above year-ago levels for the foreseeable future," Dryer told Dairyline, "or certainly through the end of January when Super Bowl weekend gives us that big spike in retail sales."

Falling milk and byproduct production is generating a supply-demand scenario that bodes well for higher prices, Dryer said. "This ... simply spells higher prices, well above year ago levels."