Two numbers crossed our desk this week that don't sit comfortably next to each other. U.S. cheese exports are tracking toward a record year, with buyers overseas still absorbing more American cheese than in any prior year on record. At the same time, alfalfa hay has spent this whole year setting one record-high monthly price after another. Both things are true. Neither one cancels the other out.
For members who buy hay, grain, or finished feed rations, the second number isn't news exactly — you've watched it climb all year, through drought conditions in more than one growing region and a summer that gave dairy operations very little relief. What's worth sitting with this week is the timing. Feed costs are still climbing in the same quarter that export demand is strongest, which means the two forces are landing on your books at once rather than trading off against each other the way they sometimes do.
Why a strong export market doesn't automatically fix a feed problem
Export strength shows up as demand for finished cheese, which is good news for members selling wholesale into that channel. But it doesn't touch your input costs directly, and for members who also run a herd or buy milk from someone who does, a record feed price is a separate line that strong sell-through on the finished product doesn't offset dollar for dollar. A producer selling cheese into a hot export market this fall is still paying this month's hay bill, not last spring's.
The gap is widest for smaller operations without a lot of pricing flexibility. A larger cheesemaker with wholesale contracts can sometimes push a cost increase through to a distributor with advance notice; a farmstead operation selling primarily at retail or through a handful of accounts has fewer places to put that cost without a customer noticing right away. If your fall pricing hasn't been revisited since the hay market moved again this summer, this is a reasonable week to check whether your finished-cheese price still reflects what the wheel actually costs to produce.
What a record export year actually changes for you
It's worth being specific about what "record exports" does and doesn't mean at the level of an individual member's business. If you sell wholesale to a distributor who exports, or you're a supplier to a larger processor that ships overseas, strong export demand is genuinely propping up the price you're being offered right now — that part is real and it's worth factoring into your fall wholesale negotiations. If you sell primarily direct to consumers or through a single regional retail account, the export number is closer to background noise: it tells you something about the health of the broader industry, but it isn't moving through to your own price sheet the way it might for a larger operation with export exposure.
That distinction matters because it's easy to read a strong industry-wide headline and assume it applies evenly to every member, when in practice the benefit of this year's export strength and the burden of this year's feed costs are landing on very different parts of the membership. A large wholesale producer is more likely to see both sides of this quarter's numbers; a small direct-to-consumer farmstead is more likely to feel mostly the feed side, without much of the export-driven upside to offset it.
None of this is a call to panic about margins — most members are managing the same feed pressure they've been managing all year, and this is a continuation of a trend rather than a new shock. But a quarter where your input costs and your sales numbers are both hitting record marks, in opposite directions, is exactly the quarter to run your actual cost-per-wheel math rather than trust that a strong sales month means a strong margin month. If you want a second opinion on how this year's feed numbers should be moving through your price sheet, the Pricing & Margin for Specialty Cheese course runs another cohort this fall and is built around exactly this kind of reconciliation.
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.