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University of Minnesota economist Marin Bozic warned of a cheese oversupply over the next six months as a new Michigan plant ramps up to 800,000 pounds of cheddar daily. He said U.S. cheese capacity will rise 7% by next summer while domestic demand grows only 1-2% annually, and the government food box program may end under a Biden administration.
Rising cheese capacity against slow demand growth implies downward pressure on cheese and milk prices, which weakens dairy-linked feed demand.
capitalpress.comCAROL RYAN DUMASCapital PressDec 4, 2020After 49 past bearish macro events, Milk (Class III) moved a median -0.6% over 5 sessions (33% higher; middle half -8.5% to +0.6%), and -7.5% over 20.
Moves of each commodity's benchmark from the last close before the event. Historical reads pool past events of the same kind; they describe what happened, not what will. Not investment advice.
The expected cheese oversupply from new plant capacity, with demand growth lagging and food box purchases possibly ending, weighs on sentiment and forward prices.
