Global Cheese Market Dynamics: Cheddar Prices Fall, Mozzarella Rises
The global cheese market has become a significant growth driver for the dairy sector, with cheese trade increasing by approximately 40% since 2017. Despite the increased supply, prices have not uniformly decreased due to regional variations in production and market dynamics.
Cheddar Prices Decline
Cheddar, a globally produced cheese, has seen its price drop by 6.5% over the past year according to Global Dairy Trade data. This decrease is attributed to increased milk production in the United States and New Zealand, with the latter experiencing a 4% growth. Additionally, American manufacturers have heavily invested in new production capacities, ensuring a stable supply.
Mozzarella Prices Rise
In contrast, mozzarella prices have increased by 1.3% over the last year, reaching €3,448 per ton, surpassing cheddar priced at €3,138 per ton. This shift is unusual, as cheddar typically costs more. The price rise is linked to recent heatwaves in Europe, particularly affecting milk supply in France and Germany. The UK also recorded a significant milk supply decline during June's heatwave, with a daily drop of 4.3% and a cumulative deficit of about 16.5 million pints.
Senior dairy specialist Tom Booijink from Rabobank highlights that such a reversal in mozzarella and cheddar prices is extraordinary, last occurring in 2019 within the EU.
Future Outlook
The future of cheese prices will depend on milk production trends in different regions. The US, Australia, and New Zealand anticipate increased production, whereas the EU faces challenges from a reduced dairy herd and lower milk prices, which have dropped by 30% compared to last year. High costs for inputs like diesel and fertilizers further strain European producers, limiting incentives to boost production.
