Several members have called the federation office this month asking the same question in different words: why does the deduction line on my milk check look wrong, even though cheese has had a strong year? It's a fair question, and the honest answer is that it's a separate problem from anything happening in the retail cheese case. It's a pricing-formula issue, and it's been building since summer.
What's actually behind the deduction
Federal milk pricing sorts milk into use classes — cheese milk, fluid milk, and a couple of others — and blends those prices into a single pool price that most producers get paid against. When the cheese-milk price runs well above the other classes, as it has through much of this year, the blended pool price ends up lower than the cheese price alone, which shows up as a negative adjustment on a milk check even though nothing about that milk's actual value went down. On top of that, some processors have been pulling their higher-priced cheese milk out of the shared pool entirely — a legal move called depooling — which increases what's left in the pool for everyone else to absorb. The result, this fall, has been the largest and most persistent version of this gap in memory, with the adjustment running two to three dollars per hundredweight negative across most of the country.
It's confusing precisely because it isn't intuitive: a strong cheese market and a bad-looking milk check can happen in the same month, for the same reason. A member who ships to a cooperative that depools will typically see a smaller hit than one whose milk stays fully pooled, which is part of why the effect has landed so unevenly across our membership this year. Members shipping through the same regional order have told us they've compared checks with a neighbor and found meaningfully different adjustments, purely because their respective cooperatives made different pooling decisions that month.
The gap has also been unusually large and unusually persistent this year, by most members' recollection. It's been building since early summer and hasn't meaningfully narrowed since, which is part of why it's drawing more attention now than a routine month-to-month swing normally would. A milk check that looks off once is easy to shrug off; one that's looked off for several months running is worth actually understanding.
What we're watching, and what you can do now
This is a pricing-formula problem, not a demand problem, and it's already drawing attention at the federal level, with producer groups pushing for a review of how the current formula behaves under exactly this kind of price spread. We don't have a timeline for any change, and members shouldn't plan around one arriving soon. What you can do now is ask your cooperative or processor directly whether your milk is being pooled or depooled, and how that decision is made — it's a legitimate question, and one a lot of members have told us they'd never thought to ask before this year.
If your milk check has looked off this fall and you weren't sure why, this is almost certainly the explanation, and it isn't something your own operation did wrong. Our Education Committee can walk any member through how the pooling math works for their specific order and cooperative, and the Membership & Outreach Committee is tracking member experiences with depooling to inform how the federation weighs in as this issue develops at the federal level.
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.