The deadline behind the two-dollar block

Block cheese has spent most of September above two dollars a pound, and members keep asking us the same question: is this the new normal, or a blip we'll be explaining away by Thanksgiving. The honest answer is we don't know yet, but the shape of the market gives some clues.

Milk production growth has been running under one percent for two years running, and the national herd has actually gotten smaller. Tight supply meeting steady holiday-season cheese demand is a straightforward story, and it's the one most of the trade press is telling. What it doesn't tell you is whether a price like this survives the first big processing plant coming back online, or a soft patch in export demand. "We've had this price before and watched it fall out from under us by January," one retail member told us on a committee call last week. "I'd rather lock in less at a price I can live with than chase the peak." Members who buy on contract have been making similar calls — asking suppliers for shorter commitment windows this fall rather than locking in a full year at current levels — worth a conversation with your own buyer if you haven't had it yet.

The margin coverage window closes Friday

Separately, and worth flagging on its own: the federal Dairy Margin Coverage signup period, which was supposed to close last week, has been extended and now closes this Friday, September 27. If you make your living on the production side rather than the retail counter, this is the program that pays out when the gap between the milk price and feed costs gets too thin — and after two lean years, several members who sat out this year's signup because they assumed the window had already shut have been re-checking their math since we mentioned the extension in committee calls.

The program isn't insurance in the traditional sense — you're picking a coverage level against a formula, not a market event — and it isn't the same thing as marketing your milk forward. It's a floor under the worst months, not a plan for the good ones. If you haven't looked at where your own margin has actually landed over the last two years, that's the number to pull before Friday, not the futures screen.

The program's math is unglamorous but worth understanding before you decide it isn't for you. Coverage is set against a formula that compares the national all-milk price to a national average feed cost, not your own farm's actual bills, so a bad year for your specific operation won't automatically trigger a payment, and a fine year for your operation could still pay out if the national numbers are weak. That mismatch is exactly why some members skip it and others swear by it — it depends on how closely your feed mix and regional milk price track the national average the formula uses.

What we're watching next

Two dollars a pound has held for weeks now, which is longer than a lot of members expected back in the spring. Whether it holds through the holiday cheese-buying season, or whether a plant restart or a soft export month knocks it back down, is the thing to watch over the next six to eight weeks. Members who sell primarily through their own retail counter feel this less directly than members selling into wholesale contracts, but both ends of that chain have been asking us the same underlying question: how long does a price like this actually last, and what do we do differently if it doesn't.

We don't have a confident answer to that yet, and we'd rather say so than manufacture false certainty. What we can do is keep flagging deadlines like this Friday's while they're still actionable. If your operation touches the production side at all, it's worth five minutes today to check whether you're covered — not next week, when the window has already closed again.

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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.