Feeling the churn
After virus took a chunk of cheese makers’ profits, artisanal producers hope to soon be on a roll
The coronavirus pandemic has had a profound impact on one corner of global trade: the wholesale price for cheddar on the Chicago Mercantile Exchange has fluctuated wildly. While mid-April saw a 40lb block of cheddar hit a low of just $1 (82p) a pound, by June 9 the price had soared to $2.81 – a record high.
Such volatility is extreme even for US cheddar, a commodity that has had its fair share of swings in the past two decades, and that is still traded in 10-minute daily bursts on the CME. But are these gyrations matched on the other side of the pond, and do they provide any hope for Britain’s army of cheese makers?
In the UK, cheese prices overall have remained relatively stable, but some sectors of the market have seen sharp swings as the disruption began.
With schools closed and people staying at home, supermarket sales have surged.
“Sales of cheddar and territorial cheeses – ‘family cheese’ as opposed to ‘cheeseboard cheese’ – saw significant levels of growth in that time,” says Nigel Murray, chief operating officer of Booths Country supermarkets.
Makers of artisan cheese, however, were hard hit by the closure of the hospitality sector that they had supplied through wholesalers. This left them with large quantities of perishable stock that needed moving.
“From the middle of March to the end of April, makers of cheeses with a relatively short shelf life – like soft or blue cheeses – were reducing prices, in some cases significantly,” says Jason Hinds, sales director and co-owner of cheese retailer Neal’s Yard Dairy.
Jamie Montgomery, maker of an acclaimed farmhouse cheddar in Somerset, saw his sales plummet. “The first two weeks were pretty scary. No orders at all from anybody.” His response was to cut down on production. “We’re making for a year ahead, so we had to gauge how much less cheddar we were selling and then guess for how long that shortfall in sales would be. We finished up making four days a week instead of seven, for the best part of eight weeks. We lost about a month’s worth of cheese.”
In response to the crisis, Booths Country supermarkets ran a pricebased campaign in April to support farmhouse cheese makers. “In the case of Graham Kirkham’s Lancashire cheese, we took a third out of the price to incentivise our customers. We didn’t pay Graham any less for his cheese and we bought and sold more of it,” says Murray.
The export market for British cheeses, including classics such as cheddar and stilton, has been affected by a number of factors. The AirbusBoeing dispute between the EU and the US has led to the imposition of US tariffs of 25pc on cheese from the EU.
Neal’s Yard Dairy, which exports British cheeses to America and Europe, reports that the US market is still very quiet. The impact of lockdowns across Europe on its exports to the Continent has been significant. In April the company sold less than half of what it had expected. May saw an uplift, while “June cheese sales to Europe were very strong”, says David Lockwood, managing director.
One possible source of an upward pressure on cheese prices in the UK would be a no-deal Brexit at the end of December 2020. The UK imports a substantial amount of cheddar from Ireland. Tariffs imposed on cheese from the EU in the event of no-deal would increase its cost.
In preparation for this eventuality, Irish processors are stockpiling cheese in the UK as a safeguard. Last December, the Agriculture and Horticultural Development Board reported that imports of Irish cheddar to the UK were on track to be the highest for at least 20 years. The UK is not self-sufficient in cheese, so increased tariffs on cheese imports could drive demand in the UK for domestically produced milk and dairy products. An environmental factor that might also increase dairy prices is the lower milk yields caused by current dry weather conditions in the UK and Europe.
A sector of the cheese market in the UK that is seeing a rise in prices is mature cheddar. This is due to high demand and a shortage of supplies.
This month trade magazine The Grocer reported that Saputo Dairy UK had withdrawn its Cathedral City extra mature from sale due to “unprecedented demand”.
“The last four weeks have seen a real resurgence in demand for cheddars of greater maturity, so mature and especially extra-mature or vintage,” says Giles Barber, director of Barber’s Farmhouse Cheeses, the UK’s largest independent family cheese-making business.
“Whereas the younger profiles of cheddar tend to get used in food service, the retail demand is much stronger for the high-end, high-flavour profile, so there’s been a real draw on a limited stock. That means more competition in that sector for supply of those cheeses, so we’re starting to see prices of those cheeses rise.”
For artisan cheese makers and wholesalers who supply hospitality, there is cautious optimism about restaurants reopening from next week. “While it’s great news that restaurants will start to open in early July, they’re not all going to reopen,” says Hinds of Neal’s Yard Dairy.
“It will be better than what we have now, but they’re planning for only half the level of business, so cheese makers are facing a shortfall. I think we’ve still got a long road to travel.”
‘The last four weeks have seen a real resurgence in demand for cheddars of greater maturity’
The Neal’s Yard Dairy shop in Covent Garden, London, which saw producers cut the price of cheese with a short shelf life in the first weeks of lockdown