The federal dairy outlook released on February 23 put the 2023 all-milk price near $20.70 per hundredweight, a decline of roughly $4.86 from last year's record but still the second-highest reading in nearly a decade. For members who buy fluid milk as an input, that softening is one kind of relief. For members who are the dairy, it's a different conversation entirely, and both kinds of members have been calling us this week.
The forecast breaks the decline out by class. Class III, the number that touches most of our members most directly because it prices the milk that becomes cheese, is expected to come off from 2022's peak. Class IV, which prices butter and powder, is expected to fall further still. Feed costs and forage supply, meanwhile, are not falling nearly as fast — a regional extension report out of the upper Midwest this month still shows tight hay inventory heading into spring planting. That's the pinch: milk revenue easing while the inputs that make milk stay stubborn.
What this changes on a make sheet
If you're a farmstead operation, a softer Class III print doesn't automatically mean a softer year. It means the spread between what your herd costs to feed and what your milk earns gets tighter before it gets looser, and the tightening usually shows up in late winter and early spring, right when caves are full from the fall make and cash is thinnest. If you buy milk from an outside supplier rather than milking your own herd, this is a good week to ask your supplier directly whether their contract price is following the federal forecast down, and on what lag — most supply contracts don't move in real time, and some are locked for the full year.
If you sell finished wheels wholesale or through a counter, an international dairy price benchmark also slipped again in February, driven mostly by softer butter and powder rather than cheese specifically. That's a useful distinction to make with a buyer who reads a single "dairy prices are down" headline and expects your wholesale price to follow immediately. Aged and specialty cheese pricing tends to lag commodity dairy by a wide margin, because your costs — labor, aging space, packaging — don't move with a commodity board the way raw milk does.
Where members are landing
A handful of members who've already run their spring numbers against the new forecast told us they're not changing production volume, just timing — pushing a planned equipment purchase back a quarter, or holding a wheel in the cave an extra few weeks to sell into what they expect will be a stronger late-spring wholesale market. None of that is advice specific to your operation; it's simply what we're hearing on committee calls, and every creamery's cash position is different.
Our take, plainly: treat this forecast as a planning input, not a verdict. It's one federal outlook released in late February, subject to revision as spring production numbers come in. If margin coverage is part of how you manage risk, this is the window to revisit your elected coverage level before the next enrollment decision, not after a bad month shows up on the ledger. If you haven't run your numbers against the new forecast yet, our Membership & Outreach Committee can point you to members in your region who've already done that math this year and are willing to compare notes.
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.