The federal milk pricing numbers for August came in last week, and they didn't move together. The cheese-linked price class climbed for a second straight month, while the protein-and-powder-linked class slid. If your creamery sells fluid product or components on the powder side, your check probably looked worse this month. If you're selling into cheese, it probably looked better. That split is worth understanding, because it means two members standing next to each other at the same market can have completely different Augusts.
We've heard from both kinds this week. A wholesale producer told us cheese demand held up better than she expected given how much milk has been coming to market lately, and her per-hundredweight number reflected it. A member who sells more of her output as whey and milk protein concentrate had the opposite month, and she's now recalculating what her fall looks like with a thinner cushion than she planned for in the spring.
Why the two prices stopped moving together
For most of this year, the two components have tracked each other closely enough that members could use one as a rough proxy for the other. That stopped being true in August. Analysts we follow point to milk production running ahead of last year's pace nationally, which puts downward pressure on the components not directly tied to cheese demand, even while cheese itself holds a firmer price. Cheese production itself has kept climbing even as some individual lines slow down — total cheese output was up again in the most recent monthly figures we've seen, even though cheddar specifically ran behind the year before, which tells you demand is broadening across cheese types rather than concentrating in the classic blocks and barrels that set the Class III number. Put simply: there's more milk than the market wants at current prices, and where that extra milk gets routed determines who feels the pressure.
If you sell a finished cheese product, you're mostly insulated from this particular squeeze for now. If your creamery's revenue depends more heavily on selling raw or lightly processed milk components — whey, protein concentrate, powder — you're the one absorbing it. A lot of members fall somewhere in between, with a wholesale cheese line and a byproduct stream running side by side, and for that group the math gets more complicated than a single number can capture.
We're not going to tell you how to price your own product; that's not our call to make, and every creamery's cost structure is different. What we can tell you is to actually pull apart your revenue by component this month rather than looking at one blended average, because a rising cheese price can mask a falling powder price on the same balance sheet. Members enrolled in Pricing & Margin for Specialty Cheese have told us that separating the two lines out is usually the first exercise in the course, and it's one worth doing on your own even if you never take the class.
Production forecasts for the rest of the year suggest this gap could persist rather than close quickly, with more milk expected to reach the market than consumption is likely to absorb. That doesn't mean panic — it means knowing which side of your business is exposed and planning your fall inventory and cash flow with that in mind, rather than assuming next month's check looks like this one.
If you want a second set of eyes on how to read your own numbers against this split, our Membership & Outreach Committee keeps a running list of members willing to talk through pricing questions informally. Reach out through the member directory if that would help.
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.