Farm share of retail price for Cheddar cheese down in 2018

In 2018, the farm share of the retail price of Cheddar cheese—the ratio of what dairy farmers received for the milk used in the cheese (farm value) to what consumers paid in grocery stores (retail price)—decreased to 28 percent from 32 percent in 2017. Although the average retail price of Cheddar cheese increased from $4.90 per pound in 2017 to $5.14 in 2018, the farm value of the 10.3 pounds (1.2 gallons) of milk used to make a pound of Cheddar cheese fell from $1.54 to $1.43 after adjusting for the value of the whey coproduct. During 2015-18, cheese supplies (sum of production, beginning inventories, and imports) grew more quickly than the sum of domestic consumption and exports—a situation that put downward pressure on wholesale cheese prices. According to projections released by ERS in June 2019, prices received by farmers for their milk are forecast to increase in 2019 and the average wholesale price of Cheddar cheese is forecast to rise from $1.54 per pound in 2018 to $1.64 in 2019. More information on ERS’s farm share data can be found in the Price Spreads from Farm to Consumer data product, updated in June 2019.

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