Members who watch the federal order pricing sheet the way the rest of us watch the weather have probably already noticed: Class IV has pulled ahead of Class III this fall, a reversal that hasn't shown up much in recent years. If your creamery buys milk on a component basis, or you're pricing a holiday order against a co-op's announced class prices, this is worth five minutes of attention before you finalize December numbers.
Why the gap narrowed
Class III tracks cheese and whey; Class IV tracks butter and nonfat dry milk. For most of the past two years, Class III has run comfortably ahead, which is part of why cheese processors have been willing to pay up for milk. This fall, tight cream supplies pushed butter demand up at the same time cheese production capacity kept expanding, and the two price lines crossed for the first time in a while — Class III sitting a little above $18 per hundredweight, Class IV a bit further above it. Neither number collapsed. This isn't a 2020-style shock. But the relationship flipped, and industry analysts covering the shift are now framing Class IV, not Class III, as the price leader heading into next year.
For a small or mid-sized cheesemaker, the practical effect shows up in two places: what your co-op pays you if you're a producer-member, and what you pay if you're buying milk from someone else's order. A handful of members have told us their December milk cost assumptions, built back in September on the old relationship, are already off by enough to matter on a holiday-volume order. If your cost model still assumes Class III sets the floor, it's worth rebuilding it before you commit to a December price.
There's a second-order effect worth flagging too: when butter and cream pull ahead, whole-milk and higher-butterfat cheeses can get relatively more expensive to make than leaner styles, simply because the milk going into them is competing with the butter plant for the same cream. If your case leans heavily toward a rich triple-crème or a butterfat-forward wheel for the holiday season, that's the line item most likely to move on you.
What to check before you quote holiday pricing
If you haven't repriced your November and December wholesale quotes since the crossover, do it now rather than after the invoices go out. A few members on the fall pricing webinar mentioned building a standing 60-day lag into their quote sheets specifically so a mid-quarter class shift doesn't get discovered at the register. That's a reasonable habit for any wheel priced more than a few weeks out.
It's also the kind of week when the dairy case gets attention for reasons that have nothing to do with your wheel — trade coverage this month noted a nationally reported launch of a lab-fermented, animal-free cream cheese alternative built to mimic real dairy protein at scale. Worth knowing about as context for how crowded the case is getting, though it's a different conversation than the one your holiday pricing needs this week.
It's also worth checking whether your distributor's pricing formula references Class III alone or a blend — some legacy contracts still do, and a distributor working off an outdated formula can end up quietly underpaying on cheese while overpaying on butterfat, which nobody notices until reconciliation.
None of this is cause for alarm. It's the kind of thing that's easy to miss during a normal week and expensive to miss during the six weeks before the holidays, when volume is highest and margins are already tight. If you want a second set of eyes on how the crossover affects your specific contract language, the Membership & Outreach Committee has been fielding these questions one at a time this month — reach out and we'll get you to someone who's already worked through it.
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.