European Cheese: Prices of Mild Cheddar, Cheddar Curd, Mozzarella and Young Gouda Falls

Trading activity in the dairy market has quieted as the summer holiday season begins and people begin to go away. Buying activity likewise has been lackluster while the remaining buyers and sellers in the market have different outlooks, making it difficult to close deals.

European cheese prices closed mostly lower over the month. Cheddar Curd on the EEX closed €76 down MoM at €5589/mt. Mild Cheddar began the month at €5617/mt and lost €67 to finish at €5550/mt. Young Gouda took the biggest fall among the cheeses on the EEX: it lost €142, ending at €4953/mt. Similarly, Mozzarella also took a big hit, trading down €126 to end July at €4915/mt.

Cheese production in the EU-27, according to data processed by CLAL based on Eurostat, BLE, ISTAT, and CLAL data, went up in May in line with the seasonal trend and 1% higher than the 5-year average. Production in May was up by 23 thousand mt to 821 thousand mt. Also, earlier in July, milk production seems to have held some stability before going back to its trend hitherto.

European prices seem to be in line with the sentiments on the global dairy trade. At the last event, cheddar weakened with the bearish drivers pushing the $4825. Another factor putting a bearish slant on dairy commodity prices in general is the dull Chinese demand. China’s dairy import from January to May 2022 was 1.4 million mt, down from a little over 1.7 million mt in the same period the previous year.

With the current high cost of living, experts suggest some buyers are changing their habits, and shoppers are seeking alternative dairy products or even buying smaller amounts of cheese. Demand from the food services sector remains uncertain as it is unclear whether customers will continue to step out amid the high cost of food and other items.

Going forward, if the demand does not return to meet existing supply, cheese prices may find it difficult to firm. That said, other market distortion factors may come in to realign the cheese market towards the end of the year.