The Real Reason Cheese Costs So Much Right Now
We've probably never seen our grocery bills swing one way, then the other, and back again the way they have since March. While states are beginning to reopen and businesses are trying to get back on their feet, there are still signs that the pandemic is causing trouble within the food supply chain. Case in point: our cheese market.
As with many food items including meat, seafood, and milk, the demand for cheese spiked in late March, when folks started stocking up before shelter-in-place and quarantine orders came down. That was enough to see retail sales for cheese skyrocket by as much as 70 percent — but that wasn't the end of it. When restaurants began closing, demand crashed through the floor, leaving food producers struggling with extra inventory. As one cheese producer told the The New York Times, restaurant industry closures meant that 80 percent of the demand for their product dried up. As a result, the price of cheese fell to as little as a dollar a pound in April on the Chicago Mercantile Exchange.
Cheese prices aren't likely to come down anytime soon
Cheese prices have come a long way since prices hit a dollar a block back in April. In just a few weeks, the wholesale price of cheddar went flying, thanks to a 160 percent bump triggered by what has become a cheese shortage. What happened to all the extra cheese, you ask? America's cheese producers couldn't continue to sit on their surplus, so they opted to start selling their cheese in overseas markets in order to move inventory, so as a result, their products are now tied up in export contracts (via Business Insider).
But unlike some growers and food manufacturers who are scaling up to meet demand, the New York Times says the cheese industry doesn't seem to be in a hurry to make any adjustments to its production to meet demand. Thanks to the uncertainty surrounding the coronavirus and questions which have come up about the possibility of a second wave, factories don't seem to have any plans of going back to normal and increasing production just yet. So it looks like we're going to have to live with higher cheese prices (and possibly higher pizza prices) for a while.