Below is a brief excerpt from a complimentary research note written by our Consumer Staples analysts Howard Penney and Daniel Biolsi. If you are an institutional investor interested in accessing our research email email@example.com
CME block cheddar prices have been setting new record highs all June driven by tight supplies, as seen in the following chart.
The USDA's food box program has competed for supplies against restaurants reopening, strong retail sales, and robust sales of pizza in restaurants and retail. Cheese plants along the East coast have been running at full capacity, and on the West coast, some manufacturers are running at 125% of capacity.
The USDA has committed to purchasing up to $3B under its Farmers to Families Food Box Program.
Milk production had declined 1.1% in May as some dairy farmers culled their herds in response to demand plunging from restaurants and schools, but slaughter rates have slowed in June.
Milk production cuts could be over in June with the higher milk prices. Weekly cheese prices set by the Chicago Mercantile Exchange are used for cheese sales the following week.