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Cheese purchasing causing erratic dairy markets
A dairy market analyst says volatile cheese prices have been the main driver for future markets recently.
Sarina Sharp with the Daily Dairy Report tells Brownfield, “January prices got very, very low and then they shot higher.”
“That’s because they got low enough that we attracted a lot of new importers to look at U.S. cheese rather than cheese out of Europe,” she explains.
She says lower cheese inventories following that wave of purchases, combined with lower milk production in the U.S. and Europe, is helping to keep a floor on prices.
“I don’t think that we can stay with cheese prices at levels that are going to be exciting to dairy producers, but I do think that we probably don’t have to go back down to that $15, which is so, so painful,” she forecasts.
Sharp says a growing Mexican economy and tourism sector have been a saving grace for U.S. cheese prices.
“Last year, Mexico saw foreign direct investment, that’s basically dollars from multinational firms building in Mexico, rise 21 percent and I think we’re seeing the benefit of that,” she says.
The U.S. Dairy Export Council says last year Mexico bought 16 percent more nonfat dry milk/skim milk powder and 20 percent more cheese than in 2022, the previous record year.
