Demand for Cheese on the Rise
As of last month, cheese manufacturing facilities across the country have been running at full capacity—or beyond capacity—to keep up with the surging demand for cheese.1 While foodservice demand dropped off significantly due to restaurant and school closures, retail cheese demand increased. Initially, due to consumer stockpiling, retail sales of cheese were up more than 70% compared to the same time last year but have since leveled off to about 20-30% of last year’s numbers.2
In addition to strong retail sales, the recent reopening of some restaurants is contributing to the rising demand for cheese. A third factor is the USDA's new Farmers to Families Food Box Program, which was enacted under the authority of the Families First Coronavirus Response Act.
Through this program, the USDA purchases fresh foods (including milk and cheese) to distribute to those in need. More than 30 million family-sized food boxes have been delivered to food banks, community organizations, and other non-profits.
Understanding the Recent Cheese Market Volatility
Cheese manufacturers have had a challenging past few months due to record-setting volatility in the cheese market in response to COVID-19. Last month, the price of block cheddar reached a historic high at the Chicago Mercantile Exchange (CME), where wholesale cheese is traded. The price of wholesale cheddar jumped to $2.81 per pound on June 9 (compared with $1 per pound in mid-April)3 and increased yet again to $3.00 per pound on July 13. Young, mild cheddar cheese serves as the benchmark for the cheese industry, with the prices of all other cheeses based on the price of cheddar.