If you priced a wheel in the first week of January and priced the same wheel again last week, you were not imagining things. Butter and cheddar block prices on the wholesale exchanges climbed hard through the first half of the month, then gave back a meaningful chunk of it in the space of a few trading sessions. For members who set their own price sheets off those benchmarks, that is not a rounding error — it is a real swing to plan around.
The run-up was driven by the usual January mix: tight cold-storage inventories after the holidays, feed and freight costs that hadn't come down from last year, and buyers restocking after a slow December. The pullback that followed looks less like a change in underlying demand and more like a market that got ahead of itself and corrected. Milk prices, notably, held up better than the more volatile spot commodities — still comfortably above where they sat a year ago.
What this means for your price sheet
"I had a distributor call asking why my invoice hadn't moved when the spot price dropped forty cents that week," one small-batch cheddar maker told us. "I had to explain that my price reflects what the milk cost me eight weeks ago, not what happened on a trading screen yesterday." That conversation is playing out across a lot of member accounts right now, and it's worth having before a buyer brings it up first.
Our advice to members who called this week was the same we'd give in any month with this much daylight between the high and the low: price off a short trailing average, not off the single best (or worst) day you saw. A wheel that takes eight weeks to age and sell shouldn't have its margin locked to a Tuesday spot price that was gone by Thursday. If you sell direct, this is also a reasonable month to remind your regulars, gently, that your price reflects milk cost and time in the cave — not a headline number they may have seen somewhere else.
For members carrying supplemental production above their historical baseline, this is also the window to look at the federal margin-coverage safety-net program for the year — enrollment for 2022 stayed open into mid-February this cycle, which gives you a few more weeks than usual to run the numbers with whoever does your books. It won't smooth out a two-week commodity swing, but it's built for exactly the kind of margin compression a bad feed-cost year can bring.
The longer view
Feed costs and labor availability remain the two things worth watching more than the daily spot price. Both were already running high before this month's volatility, and neither is likely to ease quickly. If your production planning for the year assumes 2021's cost structure, it's worth revisiting that assumption now rather than in June.
If you want a second set of eyes on how a swing like this should flow through to your own price sheet, the Membership & Outreach Committee fields exactly these questions — reach out before you reprint anything for spring.
The International Cheese Federation (ICF) and More Cheese are entirely fictional. This post is demonstration content created for MemberJunction. All people, organizations, events, courses, certifications, figures, and quotations in it are invented, and nothing here represents a real association, a real business, a real person, or real professional advice.