The federal outlook released earlier this month trimmed this year's milk price forecast for the second month running. The benchmark used for most hard and aged cheese pricing came down about forty cents from January's estimate to just under seventeen dollars per hundredweight, and the number used mainly for butter and powder came down a smaller amount alongside it. The blended all-milk price figure dropped a similar forty cents. Neither move is dramatic on its own. Together, across two consecutive monthly revisions, they're the kind of thing members with a pricing meeting on the calendar should have in front of them before they set a number.
The reasoning behind the cut is straightforward: forecasters expect more milk this year, not less, on the strength of larger dairy herds and a production estimate running close to two percent ahead of last year's total. More milk chasing a similar set of buyers tends to soften prices, and this year that pressure is landing on top of a market that was already digesting a strong 2019 for skim solids, alongside a wholesale channel that's grown more price-competitive as retail demand for specialty and artisan cheese has kept climbing.
What a fuller supply means at your bench
If you sell primarily on annual or seasonal contracts, this is mostly background noise — useful context for the conversation, not something that moves this quarter's number. If you buy fluid milk on a shorter cycle, or if you're the one setting a wholesale price sheet for spring, a softer input cost can be genuine room to work with: room to hold your retail price steady while your margin improves, or room to invest in packaging, a new SKU, or a rate increase for the people doing the aging and turning.
There's a second thread worth watching alongside the price number. Market reporters this month noted that buyers on both the wholesale and export side are moving more cautiously than the fundamentals alone would suggest — a note of general caution tied to broader economic uncertainty overseas that hadn't fully shown up in the domestic price numbers yet. We don't have a read on how far that caution travels, and we're not going to guess at it. But if you export, or if a meaningful slice of your business runs through a distributor with export exposure, it's worth asking your buyer directly rather than assuming this month looks like last month.
Regional dairy economists have also flagged that feed costs have ticked up slightly even as milk prices soften, which narrows the margin picture for the farms supplying our members' milk. That's worth keeping in mind if you buy directly from a small number of producers you know by name — a squeeze on their side of the ledger eventually shows up on yours, even in a year when your own input cost looks favorable on paper.
The most recent federal cold storage figures add a little texture to the same story. Natural cheese held in refrigerated warehouses was up modestly from the prior month, and butter stocks climbed considerably more — both consistent with a supply picture that's a step ahead of where demand currently sits. None of that is alarming by itself; stocks build every winter as production outpaces the slower retail season. But a bigger build than usual, on top of a production forecast that's already trending up, is one more reason the softer price forecast isn't a one-month blip.
What we're doing with it
We'll keep tracking the monthly outlook releases and flag anything that changes the picture meaningfully — a swing of more than a few percent in either direction, or a shift in the production estimate that outpaces what the last report assumed. In the meantime, if you're building a spring price sheet and want a second set of eyes on how a softer input outlook should factor in, the Membership & Outreach Committee keeps a running list of members willing to compare notes informally. It's not a substitute for your own numbers, but a gut check from someone who bought milk last month is worth more than a market report from someone who didn't.
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.