Cheese prices on the Chicago Mercantile Exchange dropped to their lowest in almost five years this week.
Milk production increased more than cheese demand, resulting in the price drop.
Cheddar cheese blocks fell 1.9 percent to settle at $1.41 a pound, the lowest closing price since Jan. 10, 2011.
Cheese futures for December delivery fell to an eight-month low.
But in Canada, where milk production is disciplined by marketing boards, cheese prices are going to rise Feb. 1 to give farmers a 2.2 per cent milk price increase to offset production cost which have risen more than three per cent.
Cheese inventories usually rise in the first half of the year, a time when most milk in the U.S. is produced, and are then drawn down in the second half as Americans consume more with the onset of football season (think pizza) and the holidays.
In Wisconsin and in Michigan, milk production increased by 4.5 percent in October from a year earlier, according to U.S. Department of Agriculture data.
Cheese inventories in October were 15 per cent greater.