Fewer cows, a steady case

The national milk cow herd has been shrinking a little every month for most of the last year, and the latest federal production figures out this spring confirm the pattern isn't reversing yet. Milk cow numbers are down roughly eight-tenths of a percent from a year ago, and month-over-month production growth has slowed to a crawl. For a federation with members on both the farm side and the retail side of the case, that's a split-screen kind of week.

On the farm side, fewer cows and slower growth usually mean firmer milk prices, which is welcome after a rough stretch. Several members who supply fluid milk to their own cheese operations have told us their component payments have been inching upward since the new year. That's a relief for anyone whose margin got squeezed in 2018. It is not, on its own, a reason to expand the herd — the same members are quick to say they'd rather see two or three more months of firm pricing before they commit to anything permanent.

What it means at the case

On the retail side, the story is calmer than the production numbers might suggest. Specialty and natural cheese sales have kept climbing at a steady clip for years now, and nothing about a slower milk supply changes that near-term. If anything, tighter milk supply nationally tends to support wholesale cheese prices, which is good news if you've got wheels sitting in the cave that you were worried about moving at a discount. Exports have also been a bright spot — last year's cheese export volume came in meaningfully ahead of the year before, and buyers overseas have shown no sign of losing interest in properly aged American specialty product.

None of this is dramatic. It's the kind of week where the numbers nudge in a direction rather than lurch, and that's honestly the preferable kind of week for anyone trying to plan a spring production schedule. If you're deciding whether to increase batch sizes as spring flush milk starts coming in, our read is: plan for volume, but don't assume this price strength is permanent. Feed costs move independently of milk prices, and a good March doesn't guarantee a good July.

What we're watching

A few things worth keeping an eye on heading into April:

• Spring flush timing. Members in the upper Midwest and Northeast should start seeing higher milk volumes and slightly lower components within the next few weeks. If you make a style that's sensitive to seasonal milk composition, now's the time to review your make sheet adjustments.
• Feed costs. Firmer milk prices don't help much if grain and forage costs climb at the same rate. We haven't seen a national move yet, but regional weather has been uneven.
• Export demand. A strong 2018 export year set a high bar. We'll be watching whether that pace holds through the first half of the year, particularly for aged and specialty categories.

If your operation tracks its own component data and you're seeing something that doesn't match this regional picture, we'd like to hear about it — member observations from the ground are often ahead of the published numbers by a few weeks. Send a note to your regional contact or bring it up at the next Membership & Outreach Committee call.

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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.