Every member call this spring starts the same way: milk prices are good. Class III has been sitting well above where it was a year ago, cheese blocks and barrels have climbed with it, and for the first time in a while a lot of members are seeing a milk check that actually feels like a milk check. That part of the story is easy to tell, and it's the part that shows up in the trade press.
The harder part is what it costs to get there. Diesel is up sharply from a year ago, and it touches everything on a dairy operation — the feed truck, the milk hauler, the delivery van that gets your wheels to the counter. Fertilizer is worse. Members who spread it before planting this spring are paying multiples of what they paid two seasons ago, and that cost doesn't show up on a milk check. It shows up on a feed bill six months later, after the decision to spread it is long since made.
Two numbers, one operation
If you only watch the price you're paid, this looks like an unambiguously good year. If you watch the price of what you're buying to get there, it looks like a tighter one. Both are true at once, and it's the gap between them — not either number alone — that determines whether a spring like this one actually rebuilds a cushion or just moves the squeeze from one side of the ledger to the other.
For farmstead members milking and making on the same footprint, the gap is sharpest. A higher milk price is welcome, but it's arriving at the same time as a higher feed price, a higher fuel price, and in some regions a higher price for the packaging and shipping supplies that get a wheel out the door. Recent weekly dairy market reporting has flagged tight supply and firm demand as the drivers behind the stronger milk price — the same tight-supply conditions that are pushing up the cost of the inputs on the other side of the ledger.
For members buying milk from a co-op or a regional supplier rather than milking their own herd, the pressure shows up differently. Your own fuel and feed exposure may be smaller, but expect supply contracts to reflect these input costs whenever they come up for renewal. A supplier who's absorbing a higher fertilizer bill this spring isn't going to eat that cost forever.
What to do about it
We don't have a clean fix for this one. What we can offer is a recommendation: if you haven't updated your cost-per-wheel worksheet since last year, this is the season to do it. A make that penciled out fine in 2021 on old fuel and feed numbers may not pencil out the same way in 2022, even with a better milk price sitting on top of it. Pull your actual fuel receipts and your actual feed invoices from the last quarter rather than working off last year's averages — the gap between the two has been wide enough this spring that averages will mislead you.
The Membership & Outreach Committee has fielded a run of calls on exactly this question this month and can point you toward members who've already redone their numbers this spring, several of whom found the exercise changed their wholesale pricing more than they expected going in.
None of this is cause for alarm — it's cause for arithmetic. A good milk price is real and worth being glad about. It's just not the whole picture, and the members who come out of this season ahead will be the ones who did the second half of the math too.
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.