Cream cheese prices!

[Mr. Delicious]

I was quite uspet to see my price of Cream Cheese go through the roof. Where is the price nationally? I paid about $30 to $35 for the last year, now its $45 to $48 thats for a 30lb block. I do go through about 200-300 lbs a week so its good volume. Is this really the effect of gas prices or what?

[Sebastian]

That's part of it. Another part is that the Asian markets are seeing a HUGE upswing in dairy demand, so much of the worlds milk is going there (supply and demand = drives prices up). Another thing is the in 2 months, the Canadians are going to increase their domestic subsidies, meaning that anything containing dairy made in Canada just got marked up substantially.

Might be a good time to buy some cows and start a dairy 8-) 'Course, everyone's thinking that now, and in two years milk will be at record lows...the dairy market is very cyclical..

[SuzySushi]

The wholesale price of milk is going up, supposedly because diversion of corn to ethanol production is causing the price of animal feed to increase. A long & convoluted way of saying, yes, it's due to rising gas/oil prices.

[kalypso]

I was quite uspet to see my price of Cream Cheese go through the roof.  Where is the price nationally?  I paid about $30 to $35 for the last year, now its $45 to $48 thats for a 30lb block.  I do go through about 200-300 lbs a week so its good volume.  Is this really the effect of gas prices or what?

←

Gas is only part of it. My Sysco rep and I had a long conversation about cheese prices earlier this week...and it isn't pretty.

Remember that it's really butter fat that drives the market, and cows don't produce the same quantity of milk all year long, nor does that milk have the same amount of butter fat in it all year long. Dairy prices are adjusted every 2-3 months based on the amount of butter fat on the market. Wholesale cheese price rose by $.26 in a month recently, that's an enormous jump. I've been told to expect even larger increases over the summer months.

Yes, the diversion of corn to ethanol is an issue, but so is the extremely hard winter that beef producing areas such as Colorado, Nebraska, Wyoming, etc. Cattlemen lost significant numbers of cattle that would have gone to market this Spring. They also lost a significant number of calves because they were born during the brutal blizzards, thus also reducing the number of beef cows and steers that would normally backfill the supply line for those going to slaughter. Couple that with the insatiable demand for Prime and Choice beef by the ever increasing number of steak houses and there is a growing shortage of beef either on the market or on it's way to market. Cheese prices aren't the only things going up.

To fill the void on the beef market, dairy cows at the end of their productive cycle have been sent to slaughter. This has reduced the number of dairy cows in production. Fewer cows mean less milk and less butter fat. Less milk and less butter fat translate into higher prices.

Agriculture is an integrated operation, especially now in this era of industrial food production. When one segment takes a hit, so do the related ones. And according to the market indicators it's only going to get worse before it gets better

[SuzySushi]

Here's an article from Crain's Chicago Business on how soaring milk prices are affecting Kraft, a major cheese producer.

[phaelon56]

Family dairy farms on my home turf (the dairy country of central NY state) have been going bankrupt for years due to wholesale prices for milk that have not kept up with the ongoing increases in the costs of production. If I recall correctly the wholesale prices, in real dollars, have been at their lowest level in years.

I can only hope that a significant portion of the recent increases are going to dairy farming families and helping them to preserve their way of life. But I'd be surprised if that's the case.

[Margo]

Here's a story with the Vermont angle.

It looks like higher prices will help some family farms. For others, too little, too late.

Edited June 13, 2007 by Margo (log)