In an extraordinary turnaround in the last three months, US cheese prices have gone from decade-lows in April to an all-time record high this week. On the Chicago mercantile exchange (CME) on Monday, the price of block US cheese broke the $6,600/t (€5,780/t) mark, which is a new record high.

This time three months ago, US block cheese prices were trading at their lowest point since 2009 at just over $2,200/t (€1,930/t). That’s a spike in price of 200%, or more than $4,400/t, in just three months.

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At the same time, the price of US barrel cheese has also recovered very strongly in recent months from lows of just $2,275/t (€1,990/t) in early April to close to $5,340/t (€4,665/t) this week. Again, that’s a price surge of more than 130%, or over $3,000/t, in just three months.

For context, European cheese prices are a long way off this level and are anywhere between €1,500/t and €2,700/t behind US prices. European cheddar prices are holding very steady at €3,100/t, while mozzarella prices were back slightly this week to €2,750/t.

Drought conditions in the US have negatively affected milk supply

The recovery in demand from the food service and food manufacturing industry in the US has undoubtedly helped US cheese prices over recent months. However, by far and away the biggest driver of this spike in US cheese prices is tightened milk supply.

Drought conditions in the US have negatively affected milk supply in many of the leading cheese-producing states such as Wisconsin, which has left many cheese producers short of raw material.