MD_DA830                                                         
DA                                                               
MD DA830 Cheese - Midwest                                        

MADISON, WI.  May 15, 2013 (REPORT 20)                           

MIDWEST CHEESE:                                                  
                                                                 
The price spread between barrels and blocks narrowed significantly this 
week, dropping $0.0975 in the last 3 sessions with the current price 
spread at $0.0250.  Trading this week on the CME Group was mixed in the 
last 3 trading sessions with barrels showing a net increase of $0.0075 
and closing Wednesday at $1.7300, while blocks experienced a 3 session 
decline of $0.0900 and closed Wednesday at $1.7550.  Substantial cheese 
stocks, increasing manufacturing milk supplies, and declining cheese 
sales were the major factors combining to pressure the block price lower.  
Barrel prices were buoyed by fairly steady sales.  Demand for cheese has 
been stymied by the continuing cool wet spring, delaying the grilling 
season, but this situation may be coming to a quick end as a significant 
warm front in the Midwest has pushed day time highs into the 90's.  
Higher prices for food and fuel have tightened consumer's budgets, which 
have contributed to weaker cheese sales.  Export demand has declined as 
numerous buyers have expanded inventories with recent purchases.  
According to the National Dairy Retail Report, regional ads for 8 ounce 
shredded cheese have a weighted average advertised price of $2.06, 32 
cent lower than the national average, $2.38.  One year ago the national 
price was $2.25.  For 8 ounce blocks in the Midwest, the average price is 
$2.05, is 34 cents lower than the national average, $2.39.  One year ago 
the national average was $2.26.

WISCONSIN WHOLESALE SELLING PRICES:  DELIVERED,                  
DOLLARS PER POUND (1000 - 5000 POUNDS MIXED LOTS)                
                                                                 
Process American 5# Loaf                   : 1.9250-2.6300       
Brick And/Or Muenster 5#                   : 2.2550-2.7025       
Cheddar 40# Block                          : 2.2550-3.1275       
Monterey Jack 10#                          : 2.2250-3.1275       
Blue 5#                                    : 2.5175-3.5050       
Mozzarella 5 - 6# (Low Moisture, Part Skim): 2.0975-3.2275       
Grade A Swiss Cuts 6 - 9#                  : 2.9125-3.0300       

1:00 CST rick.whipp@ams.usda.gov