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The cheese market

The supply and selection of cheese for foodservice is more abundant than it has ever been. Dick Groves, publisher/ editor of Cheese Reporter, a weekly newspaper for the dairy industry based in Madison, Wisconsin, notes that domestic cheese production grew by 3 billion pounds over the last 15 years, from 6.1 billion pounds in 1990 to 9.1 billion pounds in 2005. Nationally, cheese production was up 2.4 percent last year over the year before. At the same time, imports have risen from 370 million pounds in 1994 to 460 million pounds in 2005. “Even though imported cheeses take up a bigger piece of the pie, they still represent a relatively small portion of overall cheese consumption in the United States,” Groves says.

The large cheese supply, coupled with an expansion in milk production in 2005, is putting a downward pressure on prices. This is expected to continue throughout 2006, with prices decreasing in the first quarter then moderating if stocks begin to be depleted.

Cheese prices fell about 20 cents per pound between late September and early November 2005, according to the Economic Research Service of the USDA. At the end of 2005, the price for 40-pound cheddar blocks was $1.46 per pound and for cheddar barrels, $1.43 per pound on the Chicago Mercantile Exchange. As of the first week of March 2006, blocks closed at $1.1245 per pound and barrels at $1.1050.

However, if demand continues to be as robust as it has been over the last couple of years, prices may take a slight upward turn. Brisk restaurant business raised sales of cheese 3 percent in 2005 over 2004.

Cheddar, used as the pricing benchmark, is produced year round—as are other commodity cheeses. But the production cycle for specialty cheeses can be seasonal, depending on when the cows, sheep and goats are milking. The milk from pasture-grazed animals flows in the spring and summer and is turned into cheese that’s ready and in good supply in the fall. By winter through early spring, the stocks of some artisanal and farmstead cheeses may be depleted. The same holds true for the small-batch European cheeses from Northern climes. So if you’re counting on a particular specialty cheese for your menu, order in season.

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