Cheese To Put Squeeze On Processors

US - European processors should prepare themselves for a significant rise in the price they pay for cheese, the head of the European Dairy Association (EDA) warned on Friday.
calendar icon 27 August 2007
clock icon 1 minute read
Joop Kleibeuker told that processors may have to reconsider how they use the product to formulate their goods as a result of these potential changes in the market.

The comments will throw further weight to concerns that Europe may be facing a possible cheese shortage, as woes over the dwindling global milk supply continue to take their toll on the industry's margins.

Kleibeuker added that concerns over cheese supply had been compounded by the current high prices for products like butter and skin milk powder.

"What we have seen in various countries, is a shift in raw milk use for skin milk powder (smp) and butter, which are being sold at very good prices," he said.

This has resulted in less milk being made available for cheese production, Kleibeuker added.

Until recently, cheese prices in Europe have remained generally stable. However, with the industry unable to boost supply of the product, they are beginning to rise accordingly.

The delay in these rises, compared to the rates for butter and skin milk powder, can be related to the three to six months pricing contracts often agreed between cheese producers and their clients.

Kleibeuker suggests that changes to pricing could also affect current consumption of the product, a trend that has already occurred in the US, as processors have moved higher costs onto consumers

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