Spot prices create a cheese profit opportunity
A market expert says there is an opportunity for profit in the cheese markets right now, but there’s a catch.
Mike North with ever.ag tells Brownfield the higher volume of cheese on the spot market through the Chicago Mercantile Exchange reflects higher inventories with lower demand. He says for someone with warehouse space available, buying block cheddar for example at around $1.35 can be resold this fall when demand goes up. “So, if all I have to do is buy it today, walk into the market, sell at $1.84 for fall, now I know that I’ve got roughly fifty cents of value locked into the product that I’m buying spot knowing that I only have to carry it for four months, and to be very fair, it doesn’t cost fifty cents to store cheese.”
North says he expects to see some buyers do this soon, but right now, he’s seeing more activity from sellers trying to get rid of inventory they either don’t have room for or can’t afford to pay storage on.