Cheese Prices Just Fell Below $1.50 — but Mozzarella Isn’t Following

What happened on the exchange

The CME cash cheese market is where American cheddar changes hands in bulk, and it sets the tone for what processors, pizzerias and grocery buyers pay downstream. Blocks — the 40-pound rectangles that get cut into the cheddar you buy — had been holding in the low $1.60s through the first half of August.

Then they cracked. Blocks slipped to $1.5275 by August 21, sat there through the start of the following week, and closed Thursday at $1.4950 with 13 loads traded, according to Brownfield Ag News’ daily market wrap. Butter eased to $1.46 the same session. Nonfat dry milk was the one riser, up to $1.85.

The odd part is the spread. Barrels — the 500-pound drums that mostly end up in processed and shredded product — drifted up to $1.5750 while blocks fell. Blocks are normally the pricier of the two, and right now they are about eight cents cheaper.

Why cheese keeps getting cheaper

No single event caused this. There is simply more milk than the market has a use for at $1.60 cheese.

USDA’s Dairy Market News weekly report describes milk availability supporting cheese production across the country, with an unusually cool August improving flows through the Central states and plentiful supply in California. Plants are running steady schedules. Demand is holding steady rather than growing, and USDA notes the consumer price index for cheese has been easing year over year.

Zoom out and it is a global picture. Rabobank’s dairy team puts US milk supply up about 2% year over year and New Zealand up around 4%, while European output slips. Cheddar is usually the first thing to feel a surplus, because cheddar is the commodity everyone makes and everyone ships.

The mozzarella exception

Here is the part that matters if you are reading a pizza site rather than a futures screen. There is no mozzarella contract on the CME. The block price is cheddar. When a headline says “cheese prices fell,” it is telling you about cheddar, and mozzarella has been behaving nothing like it.

Rabobank senior dairy specialist Tom Booijink laid the divergence out in a July outlook published by DairyReporter: in Europe, cheddar has fallen 6.5% over twelve months to about €3,138 per tonne, while mozzarella has climbed 1.3% to roughly €3,448. Mozzarella now sits above cheddar, which Booijink says has not happened in the EU since 2019.

Those are European numbers, and I want to be straight about that — they are not a measurement of what an American mozzarella maker charges. But the split they describe is real: cheddar is a commodity with a surplus problem, while mozzarella is tied to pizza consumption, and people did not stop eating pizza.

Why this matters for home cooks

What the move does change is the calculation on which cheese you buy. If cheddar is cheap and mozzarella isn’t, blends get more interesting: a scoop of sharp cheddar or provolone against a low-moisture mozzarella base is a flavor play, not a budget compromise. Our rundown of what actually belongs on a homemade pie covers where each one earns its place.

The other move is format. A cheaper block market is a good argument for buying cheese in block form and shredding it yourself, which you should be doing regardless — the anti-caking starch on pre-shredded bags is exactly why it melts into a greasy, grainy mess. The fresh versus low-moisture question matters far more to your bake than eleven cents on a commodity board ever will, and our guide to matching the mozzarella to the pizza style goes style by style.

Notice the direction of travel across your ingredient list, too. Cheese is easing while the wheat crop went hard the other way this month, which puts pressure on bread flour. Your dough is getting more expensive at roughly the moment your topping stops climbing. If you are planning to feed a crowd, that is the tradeoff to budget around — and it is worth a look at the rest of the build while you are there.

What to watch next

Two things. First, whether blocks hold under $1.50 into September or bounce the way they did in mid-August — one week is not a trend, and this market has whipsawed all year. Second, whether the block-barrel inversion closes; blocks trading below barrels is not unheard of, but it tends to correct. USDA’s next monthly dairy products figures will show whether cheese output is still climbing into the surplus.