If you've glanced at a commodity board in the last week, you've probably done a double take. Forty-pound cheddar blocks have been trading well above two dollars a pound, and barrels crossed the two-dollar mark themselves on Tuesday. That's a real number, and it's been dragging the whole Class III milk price up with it — federal reporting this week put the October figure on pace to challenge the record set for the month back in 2014.
We've had a few members write in asking whether this means things are finally turning around. The honest answer is: for some of you, yes. For a lot of you, not yet, and the reasons are worth sitting with for a minute.
Two different cheese businesses right now
The rally is being driven almost entirely by retail. Grocery cheese sales have stayed unusually strong all year, because a lot of households that used to eat half their meals somewhere else are now eating them at home, and cheese is an easy thing to build a weeknight dinner around. If your product moves through a retail case — a grocery deli counter, a specialty shop, a subscription box — you're likely seeing some benefit from this, even if your invoice prices haven't caught all the way up to the board yet.
If your business runs mostly through foodservice, though, this rally can feel almost insulting. Restaurants, catering, hotel breakfast buffets — that whole channel is still running at a fraction of last year's volume in most of the country, and no amount of retail strength changes what a shuttered banquet hall orders. A few members who supply mostly wholesale accounts have told us their phones are quieter than the price chart would suggest, and we don't have a tidy fix for that mismatch. It's a real split in the industry right now, not a rounding error.
There's a second layer to this worth knowing about if you sell through a distributor: overall cheese production has actually been running slightly below last year's pace even as retail demand climbs, which is part of what's pushing spot prices up. Dry whey has also been unusually strong, largely on export demand, which matters if any part of your operation sells whey or whey products rather than just the curd.
What to do with a number you can't fully use yet
If you're one of the retail-adjacent members riding this rally, this is a reasonable moment to revisit your wholesale pricing with your buyers rather than waiting for the next contract renewal. Boards move faster than contracts do, and a lag of a few weeks on a two-dollar swing is real money.
If you're on the foodservice side and this rally is passing you by, the more useful move might be temporary: look at whether a retail-adjacent channel — a farmers market booth, a direct-to-consumer box, a relationship with a specialty shop — could absorb some of the volume that used to go to accounts that aren't ordering. Several members made exactly this pivot back in the spring and have kept the channel even as some restaurant business trickles back.
Either way, this is the kind of pricing environment where knowing your actual cost per wheel matters more than usual — it's easy to feel flush off a headline number and miss that your own margin moved less than the board did. We cover exactly this kind of reconciliation in our next post this week.
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.