WCMA Perspectives | Contributing Columnist

Demand Remains in Volatile Times

John Umhoefer executive director of the Wisconsin Cheese Makers Association

August 7, 2020


To It took a lot of calls around the industry until the answer clicked.
What is the state of the cheese industry in these volatile times? It’s this: “No one is asking what’s the hot cheese right now. It’s traditional, it’s cooking, it’s give me what I know.”

That cheese maker quote encompasses a host of opinions and data from makers in the Midwest and a few out West. It means opportunity and full capacity production for many, and worrisome sales for some, particularly in artisanal specialties.

But it’s 2020 – give it a week and everything will change.

As this is written, Wisconsin has begun a mandate to wear masks in all indoor locations in the state. Wisconsin Cheese Makers Association had previously determined that a strong majority of dairy manufacturers and processors in the state, greater than 75 percent, already had mask mandates in place at their plants.

Dairy manufacturers and processors join businesses nationwide facing COVID-19 illnesses in the workplace. It’s a credit to dairy that incidents have been small and well-managed, with leaders addressing distancing, sanitation, worker screening, temperature checks and progressive leave policies even back to March 2020.

More than 30 states have enacted mask requirements similar to Wisconsin, and politics aside, masks are an important measure to reduce workforce disruptions – a key tool to keep your staff safe and on the job.

Because cheese is selling. National scanner data shows cheese volume sales at retail remaining up about 15 percent in July compared to the same weeks last year. These sales, combined with rising foodservice orders, USDA dairy buys and export ship-outs from the “cheap cheese” days in April, conspired to rocket the benchmark spot market for block Cheddar at the Chicago Mercantile Exchange to an all-time record $3.00 per pound in July.

That lift, rather than a change in consumer demand, has high-volume cheese makers and processors reporting a softening in orders in recent weeks. Retail grocery promotions for cheese have withered and while convenient natural sliced cheese continues to sell, chunks and shreds have slowed. That slowdown signaled a turn, and at this writing, just 17 days since the $3.00 record, the spot market for Cheddar has fallen 119 cents to $1.81. Buyers will be back.

Sales into foodservice remain down across the board. Macro data finds quick service restaurant sales off 12 percent and full-service restaurants down 25 percent into late July. Cheese makers report foodservice cheese sales down in that ballpark or greater, yet none report a new downturn matching a return to reduced (or outdoor only) restaurant seating in states like Texas, California, New York and New Jersey.

Foodservice sales off 25 percent still represent growth from steep declines in April and May, cheese makers note, but no processor was bullish on foodservice growth in this third quarter of 2020. School openings (and remaining open) is the wild card that may shift eating away from home.

Pizza sales among the large chains remain strong with Domino’s reporting sales up 16 percent in the second quarter of 2020; Papa John’s up 28 percent, and Pizza Hut US sales rising 1 percent. Frozen pizza sales are up 34 percent in March through July compared to last year.

Mozzarella makers report solid production as pizza chains and independent restaurants adapt to curbside pickup and online sales.

Specialty and artisanal production and sales are too complex to generalize, yet some patterns emerge. Feta cheese sales are strengthening, and Hispanic cheeses are selling well. Manufacturers with specialties cut to exact weight for retail are performing well, but the more common sale from artisan cheese makers – bulk wheels or forms bound for higher-end cheese stores, seating dining establishments or high-end delis – are down.

Cheese has proven a staple in the diets of consumers preparing food at home, and treating themselves to an affordable, artisanal experience.

But sales favor products easy for the consumer to grab at the store, convenient to use at home and familiar enough to work with in the recipes they know.

End user demand remains, but the cheese industry has seen record low and record high benchmarks for cheese pricing, and the rollercoaster is plunging again. Volatility lies in an insecure pipeline trying to manage product volumes and cost of goods held in uncertain times. At the plant level, cheese makers should focus on workforce safety, reliable supply, and unprecedented sales and marketing communication with buyers navigating these uncertain times


The views, thoughts and opinions expressed by Cheese Reporter columnists are theirs alone, and do not necessarily reflect the views of the Cheese Reporter.



John Umhoefer

John Umhoefer has served as executive director of the Wisconsin Cheese Makers Association since 1992. You can phone John at (608) 286-1001 or e-mail John Umhoefer at jumhoefer@wischeesemakers.org

Recent Columns

Dairy's Ready for the Whistle
June 5, 2020

Truths Emerge in COVID-19's Upheaval
May 1, 2020

Your Business is Your Workforce
April 3, 2020

Perfect Day at the Dairy Forum
February 7, 2020

Dairy's Future is CDR Innovation
December 6, 2019

Reform Federal Orders Because Everything Has Changed
November 1, 2019

Water Quality Solutions Begin with Agriculture
September 6, 2019

Assistance Abounds for Artisans
August 2, 2019

Tariffs Erode Export Strength
April 5, 2019

Study: Dairy Imitators Confuse Consumers
February 1, 2019

Dairy And The Evers Administration
January 11, 2019

One Final Push for UW-River Falls
December 7, 2018

The Next Wastewater Collaboration
November 2, 2018

Moderning Milk Starts With Truth In Labeling
October 5, 2018

The Time is Now For Microfiltration
August 3, 2018

Feeling Positively June
June 1, 2018

Dairy Has Truths to Tell Millennials
May 4, 2018

Trade Towers Over Dairy Issues
April 6, 2018

Recognizing Barriers to Growth
February 2, 2018

Advancing Projects Honor the Spirit of an Icon
January 5, 2018

New Gentics Offer Growth for U.S. Dairy Sheep Farms
December 1, 2017

Great Potential & Growing Pains for Emerging Dairy Sheep Industry
November 3, 2017

Wisconsin is Building Processing Capacity for Milk Growth
October 6, 2017

A Strategic Plan For US Dairy
August 4, 2017

Raw Milk Cheese Ain’t Raw Milk
June 2, 2017

Matching Demand To Abundant Supply
May 5, 2017

Canadian Policy Hits Wisconsin Dairy Farms
April 7, 2017

Collaborating on Environmental Gains
February 10, 2017

Winning The Battle Of Perceptions
January 6, 2017

Successful Collaboration on Warm Whey
December 2, 2016

Resources Available To Help Ease Worker Shortage
September 9, 2016

Constructing Communications At UW Madison
August 25, 2016

The Making of a Champion
June 3, 2016

What do you think about 
John Umhoefer's Comments?*

Please tell us if you are a
Dairy product manufacturer 
Dairy marketer /importer/exporter
Milk producer
Supplier to manufacturer