I’m at + .17 for LMWM. Don’t ask me how or why; I have no idea… I told them I wanted an agreed upon price over block and that’s what they gave me. I couldn’t sign that thing fast enough. Despite rising fuel costs, the price has stayed the same thus far.
About a year ago they told me that they were paying block +11 cents and an additional 5 cents for freight. With carrying costs, they told me, they were actually losing money selling me cheese. The DM told me he would even show me the invoice to prove it! I told him to go ahead and bring it in for me. It’s been a year and I still haven’t seen it.
I had a buyer from another distributor tell me that the big distributors pay well below the block price for cheese. Block is what anybody can buy it from a manufacturer for. If you want 40,000 lbs you can buy it right at the CME for that price (it would be cheddar, but the principle still applies.) When you’re buying hundreds of thousands of pounds on contract the price tends to drop a bit.
If you take a look at the contract specifications for the CME cheese contract the block price also includes 300 miles of freight from the manufacturer. That means at least some of the rise in fuel costs are already included in the block price.