The price of cheese has become volatile due to the pandemic. Over the pandemic, there has been an increase in demand for cheese but a decrease in the ability to supply the goods. Cheese suppliers have been struggling. Initially when restaurants were closed the price of cheese hit record lows due to lack of demand for the good as restaurants are a huge amount of the demand for cheese. However, consumer demand has overcome the loss of demand from restaurants leading to record high cheese prices right after record lows giving a sense of volatility in the market.
Another problem for cheese suppliers is the volatility of customer behavior. During the pandemic consumers initially overstocked on cheeses such as cheddar leading to all-time highs however once consumers started to produce more of this kind of cheese the market trend changed which led to a huge drop in price. With cheese producers unable to predict which kind of cheese will be popular accurately the market will continue to remain volatile.
Recently in late April 2021, the price of parmesan cheese hit record highs. The price of parmesan cheese was predicted to be the cheese to rise this year with its price increasing anywhere between 1.50 a pound to 2 dollars a pound total. In general parmesan, can cost anywhere between 12-24 dollars a pound depending on the type of parmesan cheese purchased. The reason for it was due to changes in the available milk supply. This year cheese has been significantly more expensive to a decline in available milk supply.
Questions
1.) What other factors do you think might have attributed to the rise of the cost of cheese over the pandemic?
2.) What do you think could cause the price of cheese to drop?
3.)Which states do you think are impacted the most by the volatile nature of the cheese market? Why?
Article Links.
https://people.com/food/parmesan-cheese-prices-expected-to-skyrocket-this-year/
6 comments:
States with a high concentration of places to eat would be most effected by the high cheese prices such as California or New York. Just like how gas prices are higher today due to the sole reason of the lack of oil, I feel as though the high cheese prices can be be solely explained with the lack of cheese. I don't think there is another significant reason as to why cheese has been more expensive.
I don’t know if anyone could have anticipated a spike in cheese prices being a consequence of a worldwide pandemic. I suppose it is just an up-close example of how specific products and businesses have been severely affected by the ongoing struggles caused by COVID-19 such as initial shutdowns, disability for travel, product hoarding, and people being put out of work much easier. I think as the world begins to return to normal with more widespread vaccinations, the prices of cheese will drop back down to more stable and conventional levels. Relating to the final response question of which states are probably impacted the most by the harsh cheese market as it is currently, it is more likely more rural states that do a lot of farming. This is especially interesting because more conservative individuals tend to live in rural areas, and they are the ones who are mostly refusing to abide by the rules to eradicate COVID, or don’t even believe in it and the vaccine.
I think it's really interesting how much the pandemic has affected different industries. I never would have expected the cheese industry to be impacted like it has. Seeing the impact that Covid has had on different industries really puts it into perspective how delicate our economy is and how unprepared we are to fix issues caused by unpredictable events. I agree with Julia about how as things return to pre-pandemic norms, some of the affected industries will start to balance more as well.
Responding to question 3, I'm assuming the states that are most affected are ones that have large cheese and milk industries, such as Wisconsin. Some of these really rural areas tend to have less money/lower minimum wage than bigger cities and such so I would worry about how an extended cheese industry issue would affect them.
This reveals how fragile the economy was during covid, that little things like price in cheese increased. I agree with Malia and Julia that once we get back to some sense of normalcy then the economy will start to return back to normal as well. I also think the more impacted states would be the states that use more cheese products like the midwest states.
I think the increase in cheese price can be attributed to the initial decrease in demand. No one was buying cheese and thus cattle farmers/cheesemongers decreased their production. By the time that demand started rising again with restaurants reopening, those producing cheese couldn't meet demand and thus prices had to rise significantly. Cheeses like parmesan require a lot of time to prepare, with the minimum aging requirement for parmesan-reggiano being 12 months. Meeting this demand takes a long time and so it is clear why prices would be high as supply struggles to catch up with demand. Some cheeses like American might've not been as impacted as artisanal cheeses due to the ease of production in a factory. At the end of 2020 the price for American cheese was around $4.20, which is slightly higher than previous years, but not the highest its been at in a decade. Hopefully artisans will soon be able to catch up with demand as the country opens up and the nightmare of $24/lb parmesan cheese will end.
Parmesan age: https://www.tastebologna.net/blog/parmigiano-reggiano
American Cheese price: https://www.statista.com/statistics/236861/retail-price-of-processed-cheese-in-the-united-states/
I feel like it's interesting that the cheese industry has been hit by the pandemic as well, which is probably a byproduct of the restaurant industry being hit. Since many cheese companies rely on restaurants purchasing their produce, and with these restaurants temporarily closing, not only cheese but other industries similar to them might also be affected by the lowered demand. As for states, with Wisconsin being a big part of the cheese industry, it might be hit the hardest with many of their cheese production being stalled. Fortunately, with restaurants reopening, there's evidence that cheese is starting to stabilize and prices are rising.
https://www.bloomberg.com/news/articles/2021-05-04/cheese-makes-comeback-as-u-s-restaurants-reopen-lifting-prices
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