News

History refutes itself as cheese prices zoom upward

January 12, 2005

LOUISVILLE, Ky. — If history is correct and block cheddar prices typically are low in January, someone is busy rewriting the record books.

Block prices jumped 8 cents to trade at $1.63 on Jan. 13 at the Chicago Mercantile Exchange. The spike added strong momentum to price increases that began on Jan. 7. For the three weeks prior, blocks held firm at $1.48 per pound.

It may be too early to tell whether the early increases signal a return to last year's record cheese prices, but already block prices are 33 cents higher than on this date in 2004. Additionally, two unmet bids in today's trading could spell another increase when the market reopens on Jan. 14.

Inclement weather could be one culprit behind the rising prices. In areas such as rain-soaked California, milk production on some dairy farms is off an estimated 7 percent. Any tightening of milk supplies in a currently balanced market could drive cheese prices higher.

* Pizza Operator Impact:On an annualized basis, an increase of 8 cents will claim this much profit: