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Offline waltertore

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Mozz prices skyrocketing again
« on: October 28, 2020, 06:50:13 PM »
I got this from my rep regarding the sharp rise again in cheese prices.  My produce supplier told me today mushrooms are in short supply as well and prices will be going up. 


Cheese Makers Reel as Pandemic Sows Market
Chaos
Restaurants limit buying as producers ask ‘How am I going to sell allthis Parmesan?’
By and
Oct. 28, 2020 530 am ET
Jesse Newman Kirk Maltais
Listen to this article
6 minutes
The U.S. cheese industry is reeling from seven months of chaos as the coronavirus
pandemic causes upheaval in prices and demand.
Prices for cheeses from mozzarella to cheddar hit near-record highs this month, but
cheese makers are on edge after sharp swings in demand have thrown their production
plans into disarray. Those soaring prices have also scrambled planning for buyers from
pizza chains to grocery stores, prompting restaurants to limit purchases to avoid getting
stuck with expensive inventories if the pandemic slashes business again.
For Errico Auricchio, president of BelGioioso Cheese Inc., a Wisconsin-based cheese
maker, plunging demand last spring forced him to shift from making fresh cheeses that
can’t be stored, like mozzarella, to hard cheeses like Parmesan, which are aged for up to a
year before they are marketed. BelGioioso’s plants filled to the brim with so much unsold
cheese that he had to rent extra space to store millions of pounds of Parmesan.
Now, he worries prices will crash. “I wake up at 3 a.m. thinking: ‘How am I going to sell all
this Parmesan,’” said Mr. Auricchio.
Restaurants nervous about ordering cheese they can’t use are buying products just one
month in advance versus their typical approach of booking purchases up to a year early,
said Mark Stephenson, director of dairy policy analysis with the University of WisconsinMadison.
Executives at Domino’s Pizza Inc. and Little Caesars Pizza said sharp shifts in cheese
prices posed challenges for the chains, in some cases boosting costs.
The Wall Street Journal
@WSJ
Prices for cheeses from mozzarella to cheddar neared record highs this month, but
the industry is reeling from wild swings during the pandemic #WSJWhatsNow
Tim Barr, vice president of supply chain for Marco’s Pizza, a midsize pizza chain based in
Toledo, Ohio, said high prices have led his company to seek new, cheaper cheese suppliers.
“Cheese is, by far, our highest food cost item,” Mr. Barr said, adding that unprecedented
price increases have significantly squeezed margins.
Nationwide restaurant closures at the beginning of the pandemic cratered cheese sales
and sent prices for 40-pound blocks of cheddar, the industry benchmark, to $1 per block,
the lowest since 2003. Lots of cheese makers slowed or halted production, helping lead
dairy cooperatives that sell farmers’ milk to curb their own output by asking members to
dump millions of gallons or cull their herds.
Then the government stepped in. The Trump administration in April announced plans to
purchase $3 billion of dairy, meat and produce to be distributed through food banks. The
sudden surge in demand lifted cheese prices, and prompted BelGioioso to ramp up
mozzarella production again.
Restaurant cheese purchases also picked up over the summer as eateries pivoted to
takeout and delivery and restrictions on in-person dining eased. Pizza sales boomed at
Shredded
Block cheese prices swung from 17-year lows
to all-time highs in a matter of months
Block cheese futures, CME, year-to-date
Source: FactSet
per 40-lb block
Feb. 2020 Oct.











large chains and homebound consumers stocked up on vast quantities of cheese at
grocery stores. U.S. cheese exports rose too.
Cheddar prices surged to a record $3 per block in July, making cheese a leader in a
broader agricultural-commodity rally. Multiyear highs in futures prices for corn,
soybeans, and wheat are offering a reprieve to farmers who have suffered through a
prolonged agricultural recession that has driven some out of business.
Though the high prices have been a boon for some cheese makers, the fast shifts in
demand have made planning next to impossible, dairy executives say.
“It’s been chaos,” said Jeffrey Schwager, chief executive of Wisconsin-based Sartori Co.,
which sells cheese to grocers, pizza chains and food manufacturers. “Some weeks we’re
literally working seven days a week, running plants 24 hours per day,” he said. “Other
days we’re looking for work.”
Before the pandemic, Sartori sold grocers wheels of cheese to slice for customers at deli
counters. With delis closed or offering reduced services, grocers now are asking him to
prepackage cheese in wedges for individual sale, Mr. Schwager said.
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Paul Scharfman, chief executive of Specialty Cheese Co., which makes cheeses like paneer
and cotija in a high-school-turned-cheese-plant in rural Wisconsin, said orders for cotija
—used on fajitas and taco salads—stalled for six weeks before bouncing back to nearnormal as takeout orders breathed life back into Mexican restaurants.
“The change in demand is happening very quickly,” said Heather Anfang, head of Land
O’Lakes Inc.’s U.S. dairy foods division. Ms. Anfang said the cooperative’s cheese sales to
schools have dropped by about 30% as millions of children attend school remotely, or
part-time, and schools now want more individual servings, like string cheese, rather than
bulk bags of frozen macaroni and cheese.
Dairy economists and executives say they expect another lull when government
purchases slow.
“The government can’t buy cheese like they have been forever,” said Greg Schlafer, chief
executive of Foremost Farms USA, a major Wisconsin dairy cooperative and cheese
producer.
Since July, cheese prices have dropped sharply and risen again, influenced by successive
rounds of government purchases over the summer and fall, dairy analysts and cheese
executives say. The Trump administration announced another $1 billion for food
purchases in August, and $500 million more last week. Dairy purchases have totaled
roughly $1 billion, according to a milk producers group.
Sartori master cheesemaker Pam Hodgson grades a wheel of Merlot Bellavitano atthe company’s
Plymouth, Wis., headquarters in September 2019.
PHOTO: SARA STATHAS FOR THE WALL STREET JOURNAL
Copyright © 2020 Dow Jones & Company, Inc. All Rights Reserved
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Nate Donnay, a dairy economist with StoneX Group, said some milk buyers have been
warning farmers—who have begun rebuilding their herds—that they may be asked to
curb production again.
Meanwhile, cheese producers are reluctant to produce too much cheese in case prices
tumble, said Mr. Donnay, adding: “No one wants to be left doing ‘hot potato’ with
expensive cheese.”
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