Cheese crosses two dollars, and the case still can’t keep up

Long weekend behind us, and the number members keep bringing up on calls this week is two. As in two dollars a pound, the level 40-pound block cheese was closing in on through the second half of August, after starting the month at $1.82. It's not a blip a member can shrug off, either — it's been a steady climb most of the year, and it's the main reason the milk check has looked healthier than it has in a while.

The mechanics are straightforward even if the effect isn't. Milk production growth has stayed under one percent nationally for two years running, so supply is tight. Cheese demand into the fall — think shredded, block, and the holiday platter trade picking back up as schools and food service reopen — has been strong enough to absorb that tightness without a price break. Class III milk priced near $17.60 in August, up from the low $13s back in February, and futures were pointing toward something similar through September before an expected softening late in the year. Put those two together and you get a milk check that's finally rewarding the herd instead of punishing it.

What the trade picture adds

The export side is more mixed, and it's worth separating from the domestic price story because members sometimes conflate the two. A new round of duties on a broad list of U.S. agricultural products — including milk, cream, cheese, and yogurt lines — took effect this month on the other side of one of our larger trade relationships, layering on top of tariffs that had already been building since last year. Exporters who sell into that market are recalculating margins on shipments already in transit, and some are quoting new orders with the extra duty built in rather than absorbing it.

Neither of those things touches your domestic milk check directly. But if you're a producer selling private-label to a distributor with export exposure, or a retailer whose supplier just lost a contract lane, the ripple shows up eventually — in a delayed order, a substitution on the shelf, a supplier who suddenly has more product looking for a home. We've heard from more than one member this week whose distributor mentioned a shipment that got rerouted rather than cancelled outright, which at least suggests buyers are working around the friction rather than walking away from it entirely.

What we're watching through the fall

Analysts we've been reading are calling for prices to hold, maybe even strengthen further, into the holiday season — genuinely good news if you've spent the last two years explaining a tight margin to a lender. But tight supply cuts both ways: if a plant loses a milk source or a cave has a bad ripening run right now, there's less slack in the system to cover the gap than there was a year ago.

If your margin picture depends on export lanes as much as domestic shelf space, this is a good week to walk through your supply contracts and flag anything priced off a trade lane that's moved recently. The federation doesn't set trade policy, but we do track which lines are open and closed for members who ask, and we'll keep flagging changes here as they land. If you sell into an affected market and haven't already, loop in whoever handles your export paperwork before your next shipment goes out — a duty that shows up as a surprise on a customs form is a lot more expensive than one you priced in ahead of time.

---

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.