If you tracked the wholesale cheese market this spring, you already know it doesn't behave like a normal market. In April, block cheddar was trading near a dollar a pound, a level nobody on our Standards Committee remembered seeing in years. By June, the same block had climbed past two dollars, and by mid-July it was sitting close to record highs. Same product, same members, four months apart, an entirely different number on the board.
We've been asked more than once this month whether that swing means the market has "corrected" and things are back to normal. It hasn't, and they're not. What actually happened is that two different demand channels moved in opposite directions at the same time, and the price you saw depended entirely on which channel you sell into.
Two channels, one price signal
Before this year, roughly half of domestic cheese demand ran through restaurants, schools, and other foodservice accounts, with most of the rest going through retail grocery. When dining rooms closed in March, foodservice orders didn't slow down — they fell off a cliff, and some industry estimates put the drop near a quarter of normal volume for months at a stretch. At the same time, home cooking pushed retail cheese sales up sharply as shoppers stocked refrigerators instead of eating out.
Federal purchase programs absorbed some of the surplus that direction created, buying dairy products in bulk to move toward food banks and schools. That support, combined with the retail surge, is a large part of why the wholesale number swung back up as hard as it did. But a price recovering on the strength of retail demand and government purchases is a different thing than a market that's actually settled, and members selling primarily into foodservice have told us plainly that their accounts haven't come back at anything like the same pace.
If your business straddles both channels, the practical takeaway is to treat this summer's headline price as a blended average, not a description of your own order book. A member selling mostly to grocery has had a genuinely strong few months. A member whose business is built on restaurant and catering accounts is living through a very different year, even though the commodity board says the same thing to both of them.
We don't have a clean forecast to offer — nobody does right now — but we'd rather members plan around the split than around the headline. If you're weighing how much retail capacity to build out permanently versus how much is pandemic-driven, that's exactly the kind of question the Membership & Outreach Committee has been fielding all summer, and we're glad to talk it through.
What this means for pricing conversations
A few members have asked us whether the headline number should change how they price a new wholesale contract this quarter. Our honest answer is that it depends entirely on which side of the split the buyer sits on. A grocery account renegotiating off this summer's high board price is negotiating from real strength on their side, since retail volume has genuinely grown and shows little sign of giving that back before fall. A foodservice or restaurant account trying to use the same board price to argue your wholesale terms should hold steady is negotiating off a number that doesn't describe their own channel at all, and it's fair to say so plainly.
That distinction matters most for members who signed annual contracts back in January, before any of this happened. Several of you have told us those contracts are now badly out of step with either direction the market has moved, whichever side you're on. We don't have standard contract language to recommend — pricing terms are between you and your buyer — but we'd encourage anyone renegotiating this summer to ask which channel's numbers are actually driving the other side's position, rather than accepting the commodity board as a neutral referee. It isn't one right now, and it may not be again for a while.
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.