If you've been telling yourself the year turned out fine because the milk check has been strong, you're not wrong, exactly. Federal price series have been running near record territory most of this year, and a lot of members with their own herds are having the best top-line year they can remember. But several of you have asked us some version of the same question lately: why doesn't it feel that way once the feed bill and the rest of fall's costs are subtracted out? The honest answer is that the same conditions pushing milk prices up have also been pushing your inputs up, and this fall the gap between the two numbers has gotten harder to ignore.
Two records, moving against each other
High-quality alfalfa hay hit an all-time monthly average price this month, and while a lot of our members buy grain and byproduct feeds rather than hay directly, the two markets move together closely enough that almost everyone with animals has felt some version of this squeeze. Drought conditions across parts of the hay-growing West this year tightened supply at the same time transportation costs stayed elevated, and neither pressure has let up as we move into the season when barns need more forage, not less.
Meanwhile, demand-side signals softened over the summer. Combined milk production across several major exporting regions has been running slightly behind last year, which would normally support prices on its own, but demand has pulled back even faster in places, leaving pockets of supply that buyers know they can be patient about. None of this is catastrophic. It is, however, the kind of quiet tightening that shows up in your year-end numbers rather than in any single week's invoice, and it's worth planning around now rather than in December.
What this means depending on where you sit
If you own your herd, the practical move is the boring one: get a real forage budget in front of you before your current hay stock runs out, not after, and price at least one alternate supplier now so you're not negotiating from a shortage in January. Members who've been burned by this before tell us the mistake isn't failing to see the price move coming — it's assuming last year's supplier relationship will hold at last year's price without a conversation.
If you buy fluid milk rather than milking your own animals, the number to watch is different: ask your supplier directly whether their contract has a feed-cost pass-through clause, and if it does, model what happens to your landed milk cost if hay stays elevated through winter. A surprising number of small cheesemakers we talk to have never actually read that clause in their own contract.
And if you're a retailer or monger reading this wondering why it matters to you: it shows up eventually as a wholesale price increase that lands with less warning than you'd like. A conversation with your suppliers now about how they expect costs to move into the new year beats finding out from an invoice.
We know a chunk of you make purchasing and pricing decisions off gut feel and long relationships, and that's served this industry well for a long time. But this is a year where the underlying numbers are moving in different directions at once, and gut feel alone won't catch that. If your own bookkeeping doesn't already separate feed cost per hundredweight from your other input costs, now's a reasonable week to set that up — it's a small spreadsheet change that pays for itself the first time a price swing like this one hits.
We'll keep tracking both sides of this through the winter and flag anything that changes materially enough to affect how members should be pricing into the new year.
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.