News

Roller coaster ride continues: Unpredictable cheese market leaves pizza operators and balance sheets with serious headaches.

Pizza.com President Ed Zimmerman, a leading industry expert, reports that "Today's cheese market, with all its transparency at the CME, is fraught with unpredictable movements."

"Whatever the causes," says Zimmerman, "executing a business plan when the single biggest input cost boomerangs between $1.20 and $2.20, leaves many pizza operators and balance sheets with serious headaches. (Sure, the CME Group has debuted a futures plan -- but operators still need to know when to lock in prices.)."

The secret for pizzeria operators is to assume their cost of cheese at $1.90 - $2.00. If the market delivers lower prices, you have a cushion. If the pendulum creates a $2.10 result, it is not a knockout punch. The problem comes when owners think cheese will be $1.40.

The bottom line: Plan for high prices.

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Market Updates

Cash dairy market seems to ignore bearish milk production data.

Block cheese closed Friday 8/20/10 at $1.6475 per pound, up 2 3/4-cents on the week, and 25 3/4-cents above a year ago. Barrel closed at $1.6150, up 3 cents on the week, and 24 1/2-cents above a year ago.
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