The US dairy market has seen prices collapse to their lowest levels since 2009 in the space of just 10 days. The forced closure of restaurants, cafés, takeaways and other food service outlets all across the US due to the COVID-19 pandemic is having a devastating impact on US dairy prices.

In the last two weeks, prices for US cheese have plunged up to 40%, while butter prices have dived more than 25%. The speed of this price collapse is unprecedented and relates to the shutdown of the enormous food service industry in the US.

Since 23 March, prices for block cheese traded on the Chicago Mercantile Exchange (CME) have dropped 38%, or more than $1,500/t, to just over $2,500/t – the lowest level for US block cheese prices since 2009.

Barrel cheese traded on the CME has fared no better, with prices down over 20% in the last fortnight to $2,500/t. Meanwhile, butter prices have slumped 26%, or more than $1,000/t, in the last 10 days to just over $2,800/t.

Director of market intelligence at Highground Dairy in Chicago Lucas Fuess described the rout in US dairy prices last week as a “tragic day” for farmers and dairy producers in the US.

“Cheese and butter prices hit 2009 values and non-fat milk powder might not be far behind. All this is occurring just as milk peaks for the spring.

"The collapse in restaurant demand is really driving a lot of this. Grocery store purchases of dairy are good, but they just can't account for the loss of food service,” Feuss told the Irish Farmers Journal.

Over the last week, images have circulated on social media of dairy farmers up and down the US being forced to dump milk because there is no market for it anymore.

Wisconsin, one of the largest dairy-producing states in the US, has been particularly hard hit by the downturn in dairy prices.

One ray of hope for US dairy farmers is that it’s likely that President Donald Trump will intervene in the dairy market with some form of support package or bailout for farmers.

The US president has shown a willingness to write cheques for farmers in the past and he will want to win key farmer states such as Wisconsin in the US presidential election in November.