Cheese Just Hit Its Cheapest Price of the Year — and Mozzarella Is Still the Holdout
Ingredient Markets
Cheese Just Hit Its Cheapest Price of the Year — and Mozzarella Is Still the Holdout
Blocks fell to $1.2750 a pound at the CME while barrels sat frozen 18 cents higher. The split tells you exactly which cheese the market still wants.
Cheddar blocks on the Chicago Mercantile Exchange closed at $1.2750 a pound on Tuesday, September 29, down 3.25 cents on the day and the lowest print of 2026. Barrel cheddar did not move at all — it has been parked at $1.4525 with no sales all week, leaving blocks trading nearly 18 cents below barrels. Blocks bounced back to $1.3025 by Thursday, but the trend is unmistakable: spot cheese is roughly 15 percent cheaper than it was five weeks ago.
For anyone who buys mozzarella by the pound, the interesting part is not the number. It is the gap between the number and the dairy case.
The numbers that matter
- $1.2750/lb — CME 40-pound cheddar blocks at Tuesday’s close, down 3.25 cents, with six carlots trading between $1.28 and $1.3025.
- $1.4525/lb — barrel cheddar, unchanged and untraded through the whole week, putting blocks 17.75 cents under barrels.
- $1.3025/lb — where blocks closed Thursday after a 3.25-cent rally on three sales.
- Down about 15% — blocks were $1.5650 in late August and $1.6075 in late July, per CLAL’s weekly US cheddar series, which also puts prices around 14 percent below the same week last year.
- “Mozzarella demand is strong” — USDA’s own weekly read on the Central cheese market, in a week when bulk demand was weak and bulk stocks were called abundant.
In this report
What actually happened at the CME
The spot cheese market in Chicago is thin by design — a handful of carlots a day, each one 40,000 to 44,000 pounds — and those trades still set the reference price the rest of the US dairy chain works off. Six block carlots changed hands Tuesday and the close landed at $1.2750, per USDA’s Agricultural Marketing Service daily cash trading report.
Blocks opened the week at $1.3075, slid Tuesday, slipped again midweek, then recovered 3.25 cents to $1.3025 on Thursday, as Brownfield Ag News reported from the same AMS data. Butter had its own rough week, closing Thursday at $1.34.
The weekly picture is clearer than the daily chop. Cheese Reporter’s price tables and CLAL’s US cheddar series both show a steady ladder down since July: $1.6075, $1.60, $1.5650, $1.46, $1.35, $1.3075. Five straight legs lower, no bounce worth the name until Thursday.
Why blocks fell and barrels didn’t
Blocks and barrels are both cheddar, but they serve different buyers. Blocks go to cut-and-wrap retail and foodservice; barrels go mostly into process cheese. Barrels normally trade under blocks, so an 18-cent inversion means one of those two demand streams has quietly dried up while the other has not.
USDA’s weekly Dairy Market News for the week before this one spelled the mechanism out: retail cheese demand was holding steady, bulk demand was weak, and bulk inventories in the Central region were abundant. Milk is the other half of it. Supply has run ahead of last year all season, and when plants have more milk than contracts, the surplus lands on the spot market as blocks.
Mozzarella sits outside this entirely. There is no CME mozzarella contract — the quoted block price is cheddar, which is why I keep flagging that the headline number and the pizza cheese are two different things. When blocks dropped below $1.50 back in August, mozzarella did not follow. A month and 22 cents later, USDA still describes mozzarella demand as strong while bulk cheddar piles up.
The bearish forecast that wasn’t bearish enough
Back in July, HighGround Dairy analyst Betty Berning projected cheese averaging $1.70 a pound through the second half of 2026 and $1.61 for the year — what she called “the lowest average price since 2018,” in remarks reported by Dairy Herd. That was already the gloomy case, built on a forecast of US milk production up about 2 percent for the year.
Spot cheese has spent the past month trading 30 to 40 cents under that forecast. Worth being straight about who that hurts: a $1.27 block price is good news for a grocery bill and bad news for the people milking the cows.
Why this matters for home cooks
Cheese is the single most expensive thing on a homemade pizza, so a 15 percent move in the wholesale market is the one ingredient story worth tracking. The catch is the delay. Spot cheese reprices daily; supermarket shelf tags reprice on contract cycles that run weeks to months behind, and retailers tend to pass declines along slower than increases.
The hard evidence for that lag sits in USDA’s latest Food Price Outlook, published late last month. It still forecasts retail dairy prices up just 0.1 percent for 2026 — essentially flat for the year — while grocery prices overall run up 2.4 percent and restaurant prices up 3.5 percent. Flat dairy in a year when wholesale cheddar fell 14 percent is the lag, quantified.
What I would actually do about it
Three practical moves. First, buy low-moisture mozzarella in whole blocks rather than bags and shred it yourself — block prices track the wholesale market more closely than value-added shreds, and you dodge the anti-caking starch that makes bagged cheese melt badly. Second, if your store marks down block low-moisture mozzarella, buy ahead; it freezes well shredded and loose-packed, which bagged shreds do not reliably do.
Third, cheddar being this cheap is an argument for blending rather than going all-mozzarella. A pie that runs 70 percent low-moisture mozzarella with sharp cheddar and provolone filling the rest buys more flavor per dollar than the same weight of mozzarella alone. If you have been weighing whether extra cheese earns its money, this is the month the math tilts your way — though knowing which of the two mozzarellas belongs on which style still matters more than the price.
What to watch next
Two things. Whether barrels finally trade — a week of no sales at $1.4525 is a stale quote, and a real print either confirms the inversion or closes it. And whether blocks hold above $1.30 after Thursday’s bounce.
The grocery-shelf question runs on a slower clock. The next USDA Food Price Outlook update and the October CPI release are where a wholesale decline this size would start showing up at retail, if it is going to. The August CPI numbers had dairy as the only grocery group below zero year on year, so there is a thread to pull. For now the read is simple: cheddar is cheap, mozzarella is not yet, and picking the right mozzarella for your style still beats chasing a price.
Sources
- USDA Agricultural Marketing Service — Chicago Mercantile Exchange Cash Dairy Markets, daily cash trading reports (Cheese, Slug ID 1601): ams.usda.gov
- USDA Agricultural Marketing Service — Dairy Market News weekly report, week of September 21–25, 2026: ams.usda.gov (PDF)
- Brownfield Ag News — “Cheese blocks drop, dry whey jumps Tuesday at CME” (September 29, 2026): brownfieldagnews.com
- Brownfield Ag News — “Cheese blocks rally, butter falls Thursday at CME” (October 1, 2026): brownfieldagnews.com
- Cheese Reporter — CME cash cheese block and barrel daily price tables: cheesereporter.com
- CLAL — Cheese (40# Blocks), US weekly price series: clal.it
- Dairy Herd — “More Milk, Lower Prices: What Dairy Producers Should Expect in the Second Half of 2026,” HighGround Dairy forecast (Betty Berning): dairyherd.com
- USDA Economic Research Service — Food Price Outlook, summary findings released September 25, 2026: ers.usda.gov
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