The price of US cheddar cheese has reached record highs as shipments to China have jumped and supplies for domestic consumers have reduced, Bloomberg reports.
Spot wholesale 40-pound blocks of cheese climbed 0.5 percent to $2.3625 a pound today on the Chicago Mercantile Exchange, the highest since the data began in 1997. U.S.exports in January climbed 46 percent from a year earlier to 32,118 metric tons, as Chinese purchases doubled, according to the Dairy Export Council.
Prices jumped 18 percent this year, signaling higher costs for consumers and restaurants such as Domino’s Pizza Inc. World food prices in February posted the biggest gain in 19 months, and dairy costs reached a record, the United Nations said March 6. A rise in global demand comes as a drought threatens output in California, the nation’s top producer, and New Zealand diverts milk production to other dairy products.
“Rising Chinese demand for dry-milk products from New Zealand curtailed cheese production and boosted demand for U.S. supplies,” Dave Kurzawski, a senior broker for INTL FCStone LLC in Chicago, said in a telephone interview. “People had whittled down inventories looking for rising production in New Zealand to slow exports. Demand simply exceeded the gains in production.”
Class III milk futures, tracking a variety used to make cheese, climbed 0.5 percent to $23.29 for 100 pounds today in Chicago after reaching an all-time high of $23.43 on Jan. 31.
Michael T. Lawton, the chief financial officer of a Michigan-based Dominoe’s Pizza was quoted as saying that while the cost of cheese is “certainly higher” it hadn’t affected their prices.
Cheese is a product hard to come by in most Chinese grocery stores and eateries, as the market for the food is one of the country’s youngest.
While processed cheddar cheese was once a luxury on the mainland, the expansion of Western fast food chains like Pizza Hut and McDonalds in the late 90s led to more Chinese people eating the rubbery, processed yellow stuff stacked between burgers, which “first shaped China’s understanding of the product”.
China Economic Review says that the cheese market is growing rapidly: In 2011, China imported around US$139 million worth of cheese, a 27% increase on the year before, according to the Italian Trade Commission.
France accounts for only a small percent of China’s Cheese imports, around 6 million USD.
At a recent tasting held by Shanghai Roria, staff tasted various French, Italian and Spanish cheeses. Roria’s Business development manager noted, specifically in reference to the stronger cheeses, “About 70% said they hated it, they never wanted to see it again; 30% said it was amazingly good,” he said. “These people knew nothing about cheese.”
A sad truth, considering that Germany recently identified samples of a mysterious yellowish substance found in tombs of ancient Chinese mummies to be the oldest specimens of cheese ever discovered.