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Competing interests cause record cheese market moves

A commodity analyst says contractors buying dairy products for the Farm to Food Box Program at the same time food service purchases pick up is leading to a run-up in the cheese market.

Carl Babler with Atten Babler Risk Management tells Brownfield volatility is at an extreme as block cheese prices jumped more than a $1.50 in a very short timeframe.

“The market’s on an incredible run, $2.50 cheese is like $8.50 corn—it’s hard to hold.”

Unfortunately, he says the front-loaded demand is being factored into futures.

“The further out months are discounted $2-3 a hundredweight.  They will come up if they have to but they’re not betting that this cheese price will hold all the way till the end of the year.”

Babler is strongly recommending dairy farmers do something with the strong numbers because heavy supplies are likely to make the run-up short-lived.