Wednesday, December 15, 2010

Cheddar Prices

(click on image to enlarge)

We do live in interesting times. Today, the Bureau of Labor Statistics (BLS) released Consumer Price data through November 2010. Retail price of Cheddar cheese rose in November 2010 while the Cheddar price on the CME fell. The CME Cheddar price determines both wholesale cheese prices and dairy farm milk price.

In November, the spread between CME and retail was $3.54.

Meanwhile on the CME the second highest amount of cheese was traded - a total of 45 loads. All trades were based on bids. Five players placed bids. Jacoby bought the most. All loads were sold by Jerome.

If all these players needed cheese why did the price not go up? The price fell by 1 1/4 cents to $1.3225. One also would have to assume Jacoby could not find Jerome's number so the cheese could be bought off the exchange without having to pay the CME fee.

Fonterra's GlobalDairy Trade auction prices all rose today. There are serious concerns about the global dairy supply.

Dairy Market News lists Oceania Cheddar (Dec 9, 2010) at $1.905, which is the world price.


  1. How are the dairy gods going to spin this one? We have heard lots of market logic blaming the world prices for lowering ours. Now this happens!

  2. Jerome and Jacoby couldn't lower the milk price by selling and buying from one another off the exchange. What other reason would there be? Most of the retail cheese I'm seeing in the stores are closer to the $5.99 price.

  3. makes me sick at the bullcrap that is done to my quality milk!!