Two numbers crossed our desk this week that, on their own, wouldn't make anybody stop scrolling. Put together, they tell a small but useful story about where margins are headed as summer turns to fall.
The first is feed. Corn and soybean meal prices have kept drifting down through August, which is good news if you've been penciling out a Dairy Margin Coverage payment and coming up short. Several members told us this spring that a margin payment felt like a formality by June — this year it's looking more like a maybe, and for once that's the encouraging version of the story. Lower feed costs mean the spread between what you're paying to keep animals fed and what your milk or cheese is bringing in has room to hold, even without a support check behind it.
The second is cheddar itself, which has been remarkably calm. In the trading week ending August 9, spot prices at the exchange averaged just under two dollars a pound for both 40-pound blocks and 500-pound barrels — within a couple of cents of each other, which traders read as a market with no real tension between fresh and aged supply right now. That's well off the highs of 2022, but stability at this level, after a spring that saw more churn, is what most of our members in the wholesale channel are quietly grateful for.
The federal outlook released in mid-August also nudged its butter export forecast upward for the rest of the year — now projecting more than a 12 percent increase over last year on an annual basis — while trimming the import forecast slightly. Neither of those numbers moves cheese pricing directly, but they're both signs of a dairy complex that's finding its footing rather than lurching from one surprise to the next.
Trade coverage put a finer point on the margin side specifically: Class III milk jumped 87 cents this month to $20.66 per hundredweight, its highest level since November 2022, while Class IV rose to $21.58, its strongest price since December 2023. The two classes are now sitting closer together than they have since last September, which is a sign of a genuinely balanced market rather than one commodity propping up the other. Put a strong milk price next to feed costs that are still soft heading into fall harvest, and you get the kind of margin picture producers spent most of last year hoping for and not quite getting. That said, global cheese demand has been the one soft spot in an otherwise firm dairy complex this summer — international buyers pulled back slightly on immediate deliveries even as butter and milk powder both climbed — so the calm we're describing here is domestic and margin-focused, not a signal that export demand for cheese specifically is roaring back. Nobody we've talked to this week is popping champagne about any of it — most members have learned the hard way not to celebrate a margin number until it's actually landed in an account — but the direction of travel is the right one for the first time in a while.
What this means for your fall planning
If you sell primarily wholesale, this is a reasonable week to firm up fall contracts rather than wait for a rally the data isn't pointing toward. Block and barrel sitting this close together also means you're not likely to get burned buying or selling against a spread that flips on you in a month. If you're farmstead and selling direct, the story is less about the wholesale number and more about your own case — cooler weather brings back the braise-and-bake customers, and a stable commodity market means your own price increases, if you're planning any, won't have to fight a falling tide.
None of this is dramatic. But a fall where the margin conversation is quiet is, by recent standards, a good one. If you want help reading your own numbers against these regional figures, our Membership & Outreach Committee can point you to the right benchmarking resources — reach out through the member portal and we'll get you connected.
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.