Record Prices: Butter & Cheese

How high will they go? After suffering through a most devastating price valley through much of 2002 and 2003, the current pricing scenario for dairy products in the US has changed dramatically. Absolute panic is now driving the market as Cheese and Butter producers scramble to acquire product at a time when cow numbers and production is down.

Chicago Mercantile Exchange Spot Prices

Most producers could not have predicted the current scenario that is playing out. Just a month ago, Butter was fetching $1.80 per lb. Discussion at that time by industry analysts centered on whether butter could possibly break the $2.00 psychological barrier? Since then the spot market price of butter has increased by over $0.50, making even the most aggressive predictions at that time now appear conservative. On Wednesday March 24th the spot market price for butter was $2.36 with no one really sure at what price we will see demand match supply. Butter is now selling for more than double the price than it was at this time last year.

The story is the same for spot market prices for cheese blocks and barrels, with all-time highs being set this past week. Few could have imagined Cheese trading over the $2.00 plateau, but that is precisely what has happened. With buyers in panic mode, there is every chance that cheese prices will soon be double that of April 2003.

Genetics Worth Considering

In markets with a high Class III utilization - especially the US Mid-West where it is nearly 70% – it is prudent to invest in component-rich genetics to promote increased butter and cheese yield. In times of high milk prices there are huge benefits, but equally in times of price stress, component premiums can help keep operations in business. Producers having invested in high component yield genetics over the last decade must today be thanking their lucky stars – and their genetic advisors.

CheeseMaker Provides Extra Value

Alta’s CheeseMaker brand was established specifically for component conscious producers. Since launching CheeseMaker in 2002 Alta has continued to improve upon the stringent criteria that allow sires to gain admittance to this value-added brand. The February 2004 CheeseMaker listing averages +129 lbs Combined Fat & Protein (CFP) and +558 NM$ while providing pleasing type & longevity improvement as well. All sires include have a minimum of +100 lbs CFP and +500 NM$. They represent the ultimate list of sires for butter and cheese production.

Ask your Alta rep. about CheeseMaker sires and how they can help you position yourself to take advantage of the component driven US market.

Posted Mar 28th

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