Discover the reasons behind the surge in US cheese prices and how dairy farmers can proactively maintain their global competitiveness. Understanding these dynamics is crucial for the future of your business.
Summary: Understanding pricing specifics in various regions is crucial in the highly competitive global dairy market. US cheese prices are almost on par with New Zealand but lag behind Europe, while butter prices significantly spread across regions. However, the US faces more challenges with higher NDM/SMP and dry whey prices than New Zealand and Europe. These price differences reflect where American dairy farmers might need to adjust strategies to maintain a competitive edge.
- Spot cheese prices rose: blocks at $1.9650/lb and barrels at $1.9500/lb.
- Dry whey and NDM saw minimal drops, while butter prices stayed stable at $3.1025/lb.
- Class III futures rebounded: September futures at $20.80 per cwt, Q4 at $20.58.
- US cheese is marginally cheaper than New Zealand’s but less competitive than Europe’s.
- Butter prices show a wider spread: New Zealand’s cheapest at $2.87/lb, US at $3.10/lb, EU at $3.46/lb.
- The US is less competitive in NDM/SMP and dry whey than New Zealand and Europe.
- NDM/SMP in the US at $1.23/lb versus New Zealand’s $1.12/lb and Europe’s $1.18/lb.
- Dry whey prices: US at $0.60/lb compared to $0.46/lb in New Zealand and $0.32/lb in Europe.
Have you been following the latest developments in the dairy industry? The recent spike in spot cheese prices has sparked discussions among dairy producers. Spot blocks now command $1.9650 a pound, a 6.5-cent increase. Barrels are not far behind, climbing four cents to $1.9500 per pound. While other changes in the dairy market were less pronounced, spot dry whey dipped marginally to $0.5900 per pound and nonfat dry milk (NDM) to $1.2300 per pound.
Why is this significant? The surge in spot cheese pricing, especially if you’re considering Class III contracts, is a game-changer. September futures are now at $20.80 per hundredweight, up 56 cents. Even Q4 futures have risen, closing at $20.58. In simple terms, these figures could have a direct impact on your financial performance.
A recently released analysis states, “In the global marketplace, US cheese at $1.93 per pound is just barely below New Zealand’s $1.94.”This shows that the price difference is shrinking, which might influence competition.
But how does the United States compare globally? Here’s a basic overview:
- Cheese costs $1.93 per pound in the United States, $1.94 per pound in New Zealand, and $2.16 per pound in Europe.
- Butter costs $3.10 per pound in the United States, $2.87 per pound in New Zealand, and $3.46 per pound in Europe.
- NDM/SMP: $1.23/lb in the United States; $1.12/lb in New Zealand; $1.18/lb in Europe.
Dry whey costs $0.60 per pound in the United States, $0.46 per pound in New Zealand, and $0.32 per pound in Europe.
While the United States remains competitive in the cheese and butter industries, NDM/SMP and dry whey face increased competition. The figures indicate where opportunities and problems exist; knowing them is critical for strategic planning.
