Do any of you operators buy cheese from your distributor at a set price over current block prices? That is, “block + xx cents”. If the block price is currently $1.80 per pound, then your price might be $2.15. If the price goes to $2.00 per pound, your price goes to $2.35 per pound… and so on.
The reason for asking is that I’m told by my supplier that they have a three week buffer, so my current buying price is based on block prices three weeks ago. My gripe is this… when block prices go down, my supplier seems slow to react in adjusting prices (sometimes it’s 3-4 weeks). BUT, if the prices go up, it’s like the next week that I see the prices go back up. I’ve been tracking this trend and it’s frustrating.
I compare this to gas prices. If a gas station owner buys his gas on Monday and on Friday, the price goes up 25 cents per gallon, do you think the owner says, “oh, I’ll keep my prices the same because I bought it for less than it is now.” Heck no, he adjusts the prices based on current prices, regardless of what he may have bought the gas for when he filled his tanks.
Why can’t my supplier do the same?
I don’t (they say they cannot do this for Grande), but I would be all over them if they pulled that nonsense with me.
Yes, I buy cheese like this. I pay 17 cents over the block price and I am on a 3 week lag. This isn’t a handshake agreement; it’s a written contract that is good for 90 days, and renews automatically until myself or the distributor cancel it in writing with 30 days notice. I’ve been running on it for 3 years now.
I’m sure my distributor ends up averaging a greater than 17 cent margin. The cheese they have was usually purchased only a week prior. So they know what’s going to happen to their selling price and can adjust their buying accordingly.
Your situation is exactly why I demanded to be put on a “block plus” price system. The old saying is they “take the elevator up, and the stairs down.” I got tired of them playing games with my cheese pricing.
I’m definitely going to try to negotiate a “block plus” pricing arrangement.
I am 25 cents over block on the Friday close. So thats what I pay the following Monday when I get a delivery. That price stands for the entire week until the next Friday and so on. There is no 3 week lag it reflects the following Monday.
As a DSR I try to make a block plus agreement with most of my accts. It makes for a “no games” order process.I am able to give my purchasing dept reliable usage predictions. The only thing that screws up this arrangement is when the sharp increases come,as they do.I have had customers dump me in favor of the rep who is based on cost of inventory then back to me when they catch up.A block plus arrangement makes everyone stay focused. If I do my job correctly I can advise weather to buy a few extra blocks or go skinny cause the markets falling. Sure there are weeks when I take my lumps, like this week, with the big decreases I will be selling below cost for a couple of days. But on an up tick market I make it back on my inventory. This brings the purchasing dept on board to properly manage inventory levels.
I’d better buy extra cheese this week, then??
We are on block over pricing we pay .13 over block and are a week behind
That seems awfully cheap. What brand are you buying?
I am interested as to who uses Roma. I do and I am paying CME + 10% ( which sucks when cheese goes up) + a " production fee" …who has that???
I will assume the production fee is for dicing my cheese…right? :?
Right now it comes to about 2.49 lb does that seem high?
I use a Roma blend…90%mozz 10 % montery jack