Spot cheese and spot butter both firmed at the exchange this spring, a small shift after a winter where prices for cheddar, barrels, nonfat dry milk, and dry whey had mostly been sliding. Butter picked up a few cents a pound in a single week in early April, and by the trading week ending April 12, spot cheddar barrels were trading around $1.56 a pound and butter near $2.94. Neither number is dramatic on its own, but the direction — after months of drift downward — is what members selling into wholesale have been asking us about.
The reasons behind it aren't complicated, even if the mechanics are. Milk production for the year was revised down to a little over 226 billion pounds nationally, largely on slower yield per cow rather than fewer cows, and the federal government's own agricultural economists have been nudging the all-milk price for 2024 upward through the winter and into spring — one estimate put it near $20.90 to $20.95 per hundredweight, up from under $20.50 last year. Less milk chasing the same demand tends to move price at the plant, even before it shows up anywhere else.
What this means depends on where you sit
If you're a wholesale producer, a firmer cheese price is straightforwardly good news, assuming your input costs haven't climbed at the same rate — and for a lot of members, they have. A stronger all-milk price benefits the farm end of the business and puts pressure on the make end, since the milk going into your vat costs more even as the wheel coming out of your cave sells for a little more too. Whether that's a net win depends entirely on your contract structure and how much of your own milk you control.
If you're on the retail or counter side, a market uptick doesn't automatically show up as more margin. Members running a case have told us this spring that a wholesale bump takes months to reach a shelf tag, and raising your own price before your supplier has actually raised theirs is a good way to lose a regular customer over a number you didn't need to move yet. Watch your actual invoice, not the exchange ticker, before you touch your own pricing.
For members who both make and sell — the majority of our farmstead operations — the two effects mostly cancel out, which is its own kind of relief after a year where they didn't cancel out at all.
What we're watching
Class IV milk, the price basis tied more closely to butter and nonfat dry milk, has been rising faster than Class III this cycle, which tells us butter demand is doing more of the work right now than cheese demand is. That split matters if your business leans one direction or the other — a butter-and-powder operation is having a noticeably better spring than a straight cheddar house is.
Export demand is the other thing to watch through summer. A firmer domestic price makes US cheese and butter marginally less competitive overseas unless demand abroad is strong enough to absorb it, and members with export contracts have told us they're watching that balance rather than assuming this spring's firmness holds. If your business runs on export volume, now is a good time to check in with your buyer rather than assume the current spot price is where your next contract lands.
Our Membership & Outreach Committee tracks these swings for the quarterly member newsletter; if you want the numbers behind a post like this one, that's the place to ask.
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.