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What’s Gotten Into the Price of Cheese?

The wholesale market for Cheddar is typically a mild one. But the vagaries of supply and demand during the pandemic have caused sharp swings in cheese prices, which rose to record highs this month — just weeks after plummeting to nearly 20-year lows.

Consumers are buying way more cheese, even as the usually huge demand from restaurants and schools has fallen off. Dairy farmers and prepared-food companies, which supply ingredients to cheese makers or buy their products, have seen disruptions in their businesses. Together, these countervailing forces have fueled the up-and-down trading in the market.

Like the price of oil, silver and hogs, cheese prices are set, in part, by traders in commodities markets. Each trading day at 11 a.m. Chicago time, the Chicago Mercantile Exchange operates a 10-minute session in which buyers and sellers — typically large dairy food cooperatives, cheese producers or other companies active in the industry — electronically trade roughly 40,000-pound truckloads of young, mild Cheddar.

Cheese prices soared to a record high on June 8, when a 40-pound block of Cheddar — the benchmark for cheese, akin to a barrel of West Texas Intermediate in oil markets — touched $2.585 a pound on the CME. On Friday, the price of block Cheddar jumped even higher, to $2.65 a pound.

That was a 165 percent turnaround from mid-April, when the same block of cheese would have cost only a dollar a pound.

“It’s the most volatility that we’ve seen in the cheese market ever,” said Phil Plourd, president of Blimling and Associates, a dairy commodity consulting firm in Madison, Wis. “If there was a cheese VIX index, it would have been spiking,” he added, referring to the volatility index often described as the stock market’s “fear gauge.”

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Bulk prices for everything from mozzarella to Parmesan are quoted at a premium or a discount to the CME’s block Cheddar price. And these wholesale prices filter through to the price consumers pay at groceries and restaurants.

And much like higher-profile markets, cheese prices have been whipsawed by the uncertainty facing the American economy and bolstered by government actions.

“A lot of the dynamics that we’ve come to trust with regard to food service and retail demand have been thrown out the window,” said Dave Kurzawski, a dairy broker in Chicago with brokerage firm INTL FCStone.

During the peak of pandemic-related fears in March and April, consumers rushed to grocery stores to stockpile cheese for their coming quarantines. Retail sales surged more than 70 percent from a year earlier.

But that wasn’t enough to offset the drop in demand from shuttered restaurants and educational institutions, which together account for at least half of the sales of bulk commodity cheese, according to industry estimates. The falloff in cheese demand spilled over into the dairy market, contributing to a plunge in milk prices.

From the restaurant industry, “80 percent of the volume went away,” said Jeff Schwager, president of Sartori Cheese.

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Credit…Jeenah Moon for The New York Times

Sartori Cheese operates two plants in Wisconsin, where 600 employees produce and age hard cheeses such as Parmesan, Asiago and fontina. For a while, retail demand and orders from prepared-food makers — which use Sartori cheese in frozen pizza, salad dressings and other products — helped offset the loss from restaurant closings. Then in May, outbreaks of the coronavirus in the meatpacking industry halted production of many prepared foods.

Similar situations were playing out elsewhere. Beginning in late March, as demand disappeared, cheese stockpiles began to grow. Storage space became scarce. In the following weeks, some producers began to dump their cheese on the Chicago spot market at steep discounts. Prices plummeted.

“We got swamped with Cheddar for a time,” said John Umhoefer, the executive director of the Wisconsin Cheese Makers Association.

  • Frequently Asked Questions and Advice

    Updated June 22, 2020

    • Is it harder to exercise while wearing a mask?

      A commentary published this month on the website of the British Journal of Sports Medicine points out that covering your face during exercise “comes with issues of potential breathing restriction and discomfort” and requires “balancing benefits versus possible adverse events.” Masks do alter exercise, says Cedric X. Bryant, the president and chief science officer of the American Council on Exercise, a nonprofit organization that funds exercise research and certifies fitness professionals. “In my personal experience,” he says, “heart rates are higher at the same relative intensity when you wear a mask.” Some people also could experience lightheadedness during familiar workouts while masked, says Len Kravitz, a professor of exercise science at the University of New Mexico.

    • I’ve heard about a treatment called dexamethasone. Does it work?

      The steroid, dexamethasone, is the first treatment shown to reduce mortality in severely ill patients, according to scientists in Britain. The drug appears to reduce inflammation caused by the immune system, protecting the tissues. In the study, dexamethasone reduced deaths of patients on ventilators by one-third, and deaths of patients on oxygen by one-fifth.

    • What is pandemic paid leave?

      The coronavirus emergency relief package gives many American workers paid leave if they need to take time off because of the virus. It gives qualified workers two weeks of paid sick leave if they are ill, quarantined or seeking diagnosis or preventive care for coronavirus, or if they are caring for sick family members. It gives 12 weeks of paid leave to people caring for children whose schools are closed or whose child care provider is unavailable because of the coronavirus. It is the first time the United States has had widespread federally mandated paid leave, and includes people who don’t typically get such benefits, like part-time and gig economy workers. But the measure excludes at least half of private-sector workers, including those at the country’s largest employers, and gives small employers significant leeway to deny leave.

    • Does asymptomatic transmission of Covid-19 happen?

      So far, the evidence seems to show it does. A widely cited paper published in April suggests that people are most infectious about two days before the onset of coronavirus symptoms and estimated that 44 percent of new infections were a result of transmission from people who were not yet showing symptoms. Recently, a top expert at the World Health Organization stated that transmission of the coronavirus by people who did not have symptoms was “very rare,” but she later walked back that statement.

    • What’s the risk of catching coronavirus from a surface?

      Touching contaminated objects and then infecting ourselves with the germs is not typically how the virus spreads. But it can happen. A number of studies of flu, rhinovirus, coronavirus and other microbes have shown that respiratory illnesses, including the new coronavirus, can spread by touching contaminated surfaces, particularly in places like day care centers, offices and hospitals. But a long chain of events has to happen for the disease to spread that way. The best way to protect yourself from coronavirus — whether it’s surface transmission or close human contact — is still social distancing, washing your hands, not touching your face and wearing masks.

    • How does blood type influence coronavirus?

      A study by European scientists is the first to document a strong statistical link between genetic variations and Covid-19, the illness caused by the coronavirus. Having Type A blood was linked to a 50 percent increase in the likelihood that a patient would need to get oxygen or to go on a ventilator, according to the new study.

    • How many people have lost their jobs due to coronavirus in the U.S.?

      The unemployment rate fell to 13.3 percent in May, the Labor Department said on June 5, an unexpected improvement in the nation’s job market as hiring rebounded faster than economists expected. Economists had forecast the unemployment rate to increase to as much as 20 percent, after it hit 14.7 percent in April, which was the highest since the government began keeping official statistics after World War II. But the unemployment rate dipped instead, with employers adding 2.5 million jobs, after more than 20 million jobs were lost in April.

    • My state is reopening. Is it safe to go out?

      States are reopening bit by bit. This means that more public spaces are available for use and more and more businesses are being allowed to open again. The federal government is largely leaving the decision up to states, and some state leaders are leaving the decision up to local authorities. Even if you aren’t being told to stay at home, it’s still a good idea to limit trips outside and your interaction with other people.

    • What are the symptoms of coronavirus?

      Common symptoms include fever, a dry cough, fatigue and difficulty breathing or shortness of breath. Some of these symptoms overlap with those of the flu, making detection difficult, but runny noses and stuffy sinuses are less common. The C.D.C. has also added chills, muscle pain, sore throat, headache and a new loss of the sense of taste or smell as symptoms to look out for. Most people fall ill five to seven days after exposure, but symptoms may appear in as few as two days or as many as 14 days.

    • How can I protect myself while flying?

      If air travel is unavoidable, there are some steps you can take to protect yourself. Most important: Wash your hands often, and stop touching your face. If possible, choose a window seat. A study from Emory University found that during flu season, the safest place to sit on a plane is by a window, as people sitting in window seats had less contact with potentially sick people. Disinfect hard surfaces. When you get to your seat and your hands are clean, use disinfecting wipes to clean the hard surfaces at your seat like the head and arm rest, the seatbelt buckle, the remote, screen, seat back pocket and the tray table. If the seat is hard and nonporous or leather or pleather, you can wipe that down, too. (Using wipes on upholstered seats could lead to a wet seat and spreading of germs rather than killing them.)

    • What should I do if I feel sick?

      If you’ve been exposed to the coronavirus or think you have, and have a fever or symptoms like a cough or difficulty breathing, call a doctor. They should give you advice on whether you should be tested, how to get tested, and how to seek medical treatment without potentially infecting or exposing others.


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