US Cheddar Blocks Rally 42.75 Cents In Four Weeks While Milk Output Climbs 2.7%: American Cheese Stocks Fall To 792 Million Pounds

My view is simple. The milk number is the wrong number to price cheese from this month. US farms in the 24 major states made 18,724 million pounds in September, up 2.7%. Cheddar blocks rose 42.75 cents a pound over four weeks anyway.

Milk is plentiful

USDA published its September milk figures on 22 October. The 24 major states made 18,724 million pounds, up 2.7% on last year. The whole country made 19,443 million pounds, up 2.6%.

The herd is growing with it. There were 9,743,000 milk cows in September, up 169,000 head on a year before. Output per cow in the major states reached 2,012 pounds, 18 pounds above last September.

August was revised up as well, by 132 million pounds. Milk has not been this plentiful in years.

The cheddar price went the other way

CLAL tracks the CME 40 pound block price. Its Friday close on 25 September was 1.3075 dollars a pound. By 23 October it stood at 1.7350 dollars. That is a gain of 42.75 cents, or about a third, in four weeks.

USDA's own weekly report confirms the move. Blocks averaged 1.7385 dollars in the week to 23 October. That was 19.90 cents up on the week before. Barrels averaged 1.7040 dollars, 19.45 cents up.

The week itself was choppy. Blocks closed at 1.7300 dollars on Monday and 1.8000 on Tuesday. They fell to 1.7025 on Wednesday, then edged back to 1.7350 by Friday. Barrels held at 1.7200 for three days running.

The falling store is American cheese

USDA published its cold storage figures on 23 October. Total natural cheese stood at 1,428,556 thousand pounds on 30 September. That is 102% of a year earlier.

The split inside it runs two ways. American cheese fell to 792,213 thousand pounds, down 12.6 million pounds on the year. Other cheese rose to 613,475 thousand pounds, up 43.8 million pounds. Swiss rose 8%.

Month on month the picture is the same. American stocks were 806,689 thousand pounds on 31 August and 792,213 at the end of September. Other cheese barely moved, at 611,570 then 613,475.

So the total went up while the American block came down. The store that prices a cheddar contract is the one that shrank.

What the vats are doing

USDA's Dairy Market News gives the plant side reason. Cheddar output in the Central region dropped on plant downtime and quality problems. National cheese output is described as generally steady.

Demand splits by channel. Food service is weaker and retail cheese sales are firm. Western plants report strong export demand.

Whey is not driving the move. Extra grade dry whey closed at 84.25 cents and its weekly average fell 1.95 cents. A cheddar plant earns less on its co-product while the cheese itself earns more.

Where the extra milk went

Mozzarella demand remains strong in the Central region, USDA reports. The other cheese store holds Italian and speciality types. That store grew 8% in a year.

Swiss stocks reached 22,868 thousand pounds, up 8% on the year. Cream cheese, Hispanic and speciality lines sit inside the other cheese figure. None of them settles against the cheddar block price.

Butter says the same thing about a loose milk pool. Stocks reached 295,673 thousand pounds on 30 September, 16% above a year earlier. Butter itself closed at 1.3400 dollars a pound and its weekly average rose 3.80 cents.

Nonfat dry milk closed at 2.0950 dollars and its weekly average fell 5.55 cents. Milk is finding homes outside the cheddar vat.

What this means for the market

A cheddar buyer is priced by the narrowest link in the chain. The milk pool is the widest link and it is loose. The American cheese store and the cheddar vats are narrow, and both tightened.

Three things decide the case for anyone buying or selling cheddar here. The first is which store holds the type on the contract. The second is whether the plants that make it are running. The third is whether exports are taking the surplus.

An entrant should price the type rather than the country. A loose national milk pool is no promise of cheap cheddar.

We will be watching whether American cheese stocks keep falling while other types build. That is a matter of types rather than totals. Our Global Cheese Database 2026 tracks 39 cheese types across 48 markets in tonnes.