Cheese Inventories High Amidst Dip in Demand

The second quarter of 2022 posted record cheese inventory levels despite tight supplies. Production followed suit, pushing new record highs at the start of the quarter. However, cheese disappearance fell 10% in April from last year, while cheese demand only rose 0.6%. The slowed domestic demand, coupled with high production costs, pushed U.S. cheese inventories to the record high of 1.5 billion pounds, a 31 million increase from last month.

However, U.S. butter inventories continue to be tight with high prices and strong demand for U.S. milkfat on both domestic and international markets. Will relief come for the record-high cheese inventory? Strong exports could be the saving grace, particularly with China relaxing COVID-19 lockdowns. Meanwhile, Mexico remains a crucial customer of U.S. cheese, with the country importing 79% of its total cheese needs from the U.S.

Read more on cheese inventories here.