Market Reports

Although things had started to bounce back in June, the fledgling economy recovery seems to have stalled in July as the virus rages on. The initial panic has calmed, but the pandemic will continue to disrupt the dairy industry in myriad ways.

Cheddar blocks have lost ground every day since they topped out less than two weeks ago. Still, there is more than enough cheese to meet demand, even if manufacturers dug into inventories last month.

On Monday they sprinted straight uphill to a record-shattering price. Their journey to that point is an astounding feat of strength and stamina but by the end of the week, prices had fallen far enough to attract buyers.

In an environment as fickle as the Chicago Mercantile Exchange, bulls are not typically bred for their stamina. But in the Cheddar block market there is a bull of a different breed.

Although there is plenty of milk, there is a shortage of fresh cheese and demand remains resilient despite the price.

Fears that the meteoric rise was all sparkle and no substance were doused by buyer’s willingness to step in and make a purchase, rather than sit on the sidelines and let the selloff run its course.

A steep decline in milk output in May likely slowed cheese production and tightened the supply of fresh cheese for sale in Chicago today, prompting the remarkable run in the spot market.

After a few days romping around LaSalle Street, they left abruptly. By Thursday the market had run out of positive fundamental news with which to fill their troughs.

The markets sprinted straight uphill on Monday and with amazing stamina and speed, they maintained their frantic pace. They finally tired on Friday and despite the late-week retreat, the total mileage is impressive.

The pandemic sickened the dairy markets in April, creating immense pain on the farm. But there are better days ahead.