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Good afternoon to all,
The market turned around and jumped yesterday much to my surprise. The tone of the market is full steady which usually means a big jump is on its way. Today they are saying this inventory is short compared to demand.
We are close to the record high price of butter as the market continues to surge upwards. There continues to be a worldwide shortage of butterfat. The U.S. has been exporting as we were so much less expensive than other world butter markets. Manufacturers are scrambling to get inventory due to expected shortages later this year. We typically import AMF (explained below) but there is none coming in putting further demands on butter supplies. Cream has been incredibly short in the marketplace and with the downturn in milk production less cream is being spun off. I am hearing that there could be more upside in the near future.
Cream and Cream Cheese:
As I mentioned last week, the rapid rise in butter is causing fluid cream to rise dramatically for next month. I am expecting over .40 cents per quart to go into effect for the week of 1/31 We have plenty if you would like to pad your inventory some. Cream cheese is getting harder to get. Demand has shot up so much that there is just nowhere near enough to go around. Schreiber (one of the world’s largest producers) announced allocations going forward. Smithfield cream cheese is almost non-existent at this point. I used to get a trailer most weeks and as of late, I am able to only get 2 pallets per week. We are doing our best to supply our cream cheese customers.
Both Block and Barrel are correcting to more seasonable levels. Blocks tumbled this week and Barrels dropped dramatically today. The spread is back to 2.75 cents. Barrel will drop more next week due to the close being lower than the current average.
Thank you all for your continued business. All of us at Honor Foods wish you a safe and relaxing winter weekend.