Reading the market without the data

If your make sheet, your buyer calls, and your gut feel all disagreed with each other this month, you weren't imagining it. The federal shutdown that ran from late December into the fourth week of January put a five-week hole in the reporting members lean on to plan production and pricing — crop and stocks reports that were due out January 11 never landed, and the statistics agencies spent the back half of the month working through a backlog rather than a normal release calendar. We're only now seeing the numbers catch up.

For most of our membership that's more than a bureaucratic footnote. Milk pricing opened 2019 soft — Class III came in under $14 in January, well off where producers want to sit — and a lot of members make sourcing and inventory decisions off the same government price series that just went quiet for over a month. Several of you told us you were pricing January contracts off last quarter's numbers and a phone call to your co-op, which is not how anyone wants to run a business.

What we're watching now that data is flowing again

The near-term question is whether the reports still ahead of us this quarter show milk prices firming as the year goes on, which is what most trade forecasts were pointing to before the lapse. Feed costs, herd numbers, and the all-milk price all feed into member decisions about whether to lock in supply contracts now or wait. Our sense from member calls last week is that most of you are waiting — a reasonable instinct when the data you'd normally use to decide is a month behind.

We'd also note, gently, that a five-week gap in official statistics is a good reminder of why some of our small-batch and farmstead members keep their own production and cost logs independent of anything federal. If you don't already track your own cost-per-batch numbers month over month, this is as good a nudge as any to start — you'll thank yourself the next time Washington closes for business.

There's a bright spot buried in the same news cycle. A trade survey out this month put the number of artisan and specialty cheesemakers in the country at nearly a thousand, most of them producing well under 50,000 pounds a year — which is to say, an association full of businesses your size, not the industrial end of the shelf. That's worth remembering on a month when the federal numbers are the ones making headlines: the growth story in specialty cheese has been happening at the small-batch level for years now, shutdown or no shutdown.

The other shoe: raw-milk cheese and the 60-day rule

Unrelated to the shutdown, but timely: we've fielded several questions this month from members making or considering raw-milk cheese about the federal 60-day aging requirement for interstate sale. The rule hasn't changed, but state-level enforcement conversations pick up every year around this time as new producers plan their spring cave schedules. If you're aging anything you intend to ship across state lines unpasteurized, the aging clock and the documentation trail both matter, and our Standards Committee fields exactly this kind of question year-round.

If you're planning a 2019 production calendar around either the interstate aging rule or your own read on where milk pricing is headed, drop a note to the Standards Committee — they've seen this movie before and can talk through what a solid documentation trail looks like before you're three months into aging something you can't yet sell where you hoped to.

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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.