If your milk check has felt thinner than it should this quarter, you are not imagining it. The federal supply and demand report released a few weeks back trimmed the 2023 all-milk price forecast again, cutting it 65 cents to land just below $20 per hundredweight, with the Class III price cut over a dollar and the Class IV forecast only nudged up a nickel. Milk production held roughly steady against the prior estimate, which is the quieter half of the story: supply isn't collapsing, prices are just eroding steadily underneath it.
That combination is exactly what pushes margins down. For members enrolled in the federal Dairy Margin Coverage program, the number that matters isn't the milk price on its own but the gap between that price and feed costs, and that gap has sat low enough for two months running to trigger payments at several coverage tiers. That is the program working as designed — it exists for stretches like this one — but it is also a plain signal about how tight the underlying economics have gotten for anyone producing milk right now.
What we're hearing from members
A cooperative manager in the upper Midwest told us her per-cow output numbers for the last two weeks were the softest she'd seen since a stretch back in 2021, not a collapse, but a steady grinding decline that shows up in the settlement statement before anyone has time to react to it. A creamery owner further south, who buys milk rather than milking her own herd, said her supplier has already flagged tighter margins heading into August and asked her to lock in pricing on what she can now rather than waiting.
None of this is catastrophic on its own. But a soft price report layered on top of an already-thin margin changes how members should be thinking about the rest of the year: feed contracts, whether a Dairy Margin Coverage enrollment that looked unnecessary back in January deserves a second look before the fall sign-up window, and how much cushion is actually built into next quarter's budget.
What to watch and do next
If your operation isn't currently enrolled in a milk-price safety net program, this is a reasonable month to revisit that decision with your co-op or lender rather than waiting for the next report to make the case for you. If you buy fluid milk rather than produce it, ask your supplier directly about pricing commitments for August and September instead of waiting for a shortfall notice to arrive on its own schedule. And if your board or co-op wants a plain-language walkthrough of what a report like this one actually means for your specific operation, the Membership & Outreach Committee can help translate the federal numbers into something your members can act on.
We'll keep tracking the monthly price reports through the rest of the summer and flag anything that changes the picture materially. If you make a small batch of your own hard cheese and sell direct, this is also a good week to check your own pricing sheet against your input costs rather than assuming last quarter's numbers still hold; a soft milk market has a way of quietly narrowing your own margin even when your retail price hasn't moved.
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.