At the Chicago Board of Trade, it’s time to cut the cheese . . . sort of.
Around 20 traders yelled about the price of cheese, specifically truckloads of cheddar, for the last time on the derivatives exchange’s floor on Friday.
The 10-minute auction that determines the nation’s benchmark cheese price — held each weekday at 10:45 a.m. in a corner of the trading floor since 1977 — will go electronic next week. The switch will make it easier for other groups of traders to access the cheese market, which has an impact on milk prices as well.
“Without question, today was the most lively spot session I have ever seen,” said Robert Chesler, Vice President of the Foods Division for INTL FCStone, a financial services firm that trades commodities. “From the moment it started, there was yelling and shouting. It was nostalgic. There were a lot of memories from the past, a lot of excitement for the future — the dawn of a new era.”
Chesler said he saw around 20 traders on the floor, instead of the usual dozen. And there were more guests than usual; more than a dozen dairy industry customers also watched the last exchange, he said.
Mike McCully, President of the McCully Group, a consulting firm for dairy companies, said he sees the move to electronic trading as “a natural evolution,” moving the cheese trade “out of the 20th century into the 21st century.”
According to the Wall Street Journal, the cheese auction traces its roots to the Wisconsin Cheese Exchange, founded in 1918. Later named the National Cheese Exchange, it remained in Green Bay, Wisconsin, for decades before moving to Chicago.
Last year, traders bartered around 50 million pounds of cheese in the auction, the Journal reported.
Chesler said seven truckloads of block cheddar and 23 truckloads of barrel cheddar were traded on Friday. A truckload totals between 40,000 and 44,000 pounds of cheese.