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August 14, 2019

Farm Share Of Retail Price For Cheddar Cheese Drops

 |  By: Jim Dickrell

The farm share of the retail price of cheddar cheese declined to 28% in 2018, reports USDA’s Economic Research Service (ERS).

In 2018, the average retail price for a pound of cheddar was $5.14, but farmers received just $1.43 for the milk that went into producing that cheese. Their share declined from 32% in 2017, when they received $1.54 for cheese that was retailing at $4.90/lb, reports ERS.

The agency did not give a reason for the decline, but notes: “During 2015-2018, cheese supplies grew more quickly than the sum of domestic consumption and exports—a situation that put downward pressure on wholesale cheese prices.”

The implication, however, is that retailers were better able to maintain retail price levels during this period even though wholesale prices declined. The result was the increased spread between retail and wholesale prices.

In 2014, when milk prices peaked, farmers received 37% share of the retail price.

The farm share of retail cheddar cheese prices peaked in 2007, however, when farmers received 39% of the $4.23 retail prices. It dropped to its lowest point two years later when milk prices crashed. In 2009, farmers received just 24% of the retail cheddar price.

Since 2000, the farm share of retail cheddar cheese prices have averaged 31%.