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Cheese is such a beloved food and household staple. However, due to the chaos of the COVID-19 pandemic, it seems like cheese prices have surged. Consumers are now dealing with having to purchase expensive cheese, when it seems like they need regulated prices now more than ever. But what exactly happened that led to the cheese price getting this way?
Due to the shutdown of schools across America and reduced demand from restaurants, consumers have been purchasing much more cheese for their every-day use. This offsets the established cheese prices created by traders in commodities markets and has caused disruption in dairy farmers’ and prepared-food companies’ businesses.
During the peak of fears concerning the pandemic in March and April, cheese-related retail sales surged more than 70% from a year earlier. Although cheese was fleeting the shelves in supermarkets like Aldi and Kroger, it did not help balance the loss in demand from restaurants and educational institutions. As demand disappeared, cheese stockpiles began to grow. Storage space became limited. Prices originally plummeted.
In April, with Cheddar cheese prices flattening to $1 a pound, United States-made cheese was priced below foreign competitors, making it more enticing for exports. This provided domestic makers with a new source of demand, helping to stabilize prices. The Department of Agriculture also announced plans to spend $3 billion to buy food from farmers, including $100 million a month on a variety of dairy products. This announcement helped balance prices.
On June 8, cheese prices ascended to a record high. A 40-pound block of Cheddar cheese reached $2.585 per pound on the CME (Chicago Mercantile Exchange). It proceeded to jump higher at $2.81 a pound, making it a 181% turnaround from mid-April. From there, bulk cheese prices on almost all types, like mozzarella and parmesan, have been quoted at a premium or discount to the CME’s block Cheddar cheese price. The wholesale prices filter through to the price consumers pay at grocery stores such as Hannaford and Aldi, as well as restaurants.
Now, as restaurants around the country slowly open back up, they are stocking up on cheese to ensure an adequate supply. Due to these rapid demands, cheese factories have struggled to meet them. This is because dairy farmers who cut production during the worst parts of the pandemic were unable to supply these companies with enough milk. Still, shoppers continue to buy 20 to 30% more cheese than last year. The return of the demand has pushed cheese prices higher.