If you've looked at your milk check this quarter and thought "that's the biggest number I've seen in years," you're not imagining it. Class prices have been climbing steadily into spring, and several members have told us their per-hundredweight numbers are the strongest of their careers. That should be good news, full stop. It mostly is. But almost everyone we've talked to this week has followed the good news with a "but."
The "but" is feed. Corn, soybean meal, and alfalfa have all gotten more expensive over the past several months, and the volatility in global grain markets since late February has made forward contracts harder to pencil. A tight energy market isn't helping either — anyone running a bulk tank, a pasteurizer, or a cave dehumidifier around the clock has watched their utility bill climb right alongside their milk price. For a small creamery buying feed by the truckload rather than hedging futures, the spread between what you're paid and what you're spending can close faster than the headline price suggests.
Members enrolled in the federal Dairy Margin Coverage program may have noticed the enrollment window for this program year was recently extended into late March, specifically because the agency running it wanted to give producers more time to weigh feed-cost trends before locking in coverage levels. That's a useful signal on its own: even the program built to smooth out these swings is acknowledging how hard the math has gotten to call this year.
What this means for your price sheet
A few members on last week's regional call asked us the same question in different words: should we be raising retail and wholesale prices now, or waiting to see if this settles? We don't have a house answer — every operation's cost structure is different — but here's what we'd suggest checking before you decide anything:
- Your actual feed cost per hundredweight of milk, not last year's number. If you haven't recalculated since January, do it this week.
- Your fixed energy costs, especially if you're on a variable utility rate. A cave running an extra few degrees warm because you throttled the dehumidifier to save money is a food-safety risk, not a cost saving.
- Your wholesale contracts, particularly any that lock a price through summer. A contract that looked generous in December can look thin by June if inputs keep climbing.
If you want a structured way to walk through this rather than doing it on a napkin, the federation's Pricing & Margin for Specialty Cheese course covers exactly this kind of scenario — building a real margin picture from your make sheet forward, not backward from what the market will bear. A new cohort opens again this spring; watch your inbox for the date.
The distributor's view
We also heard from a few members on the retail and distribution side this week, including folks moving product through Valley Oak Cheesemakers' regional network, who noted that buyers are asking more questions about price stability than they have in a while. Nobody's pulling orders. But retail buyers who got burned by a supplier repricing mid-contract in the last two years are watching more closely, and a clear, well-documented rationale for a price change goes a long way with them.
None of this is cause for alarm. Record milk prices are, on balance, a good problem to have, and several members told us this week that they're the first genuinely comfortable quarter they've had since before the pandemic. But "comfortable" this year means watching your inputs as closely as your outputs. If your last cost review was more than a quarter old, this is a good week to redo it.
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.