Two weeks ago we wrote about a cheese price rally arriving alongside another round of lockdowns, and told members to expect the gain to hold given how strong retail demand had been running. The block cheese market didn't cooperate. Federal market reports for the first week of December show the price giving back a meaningful share of November's climb, and the milk price components tied to cheese pulled back with it.
It's worth being plain about why this matters even if you never watch a futures board: the same swing that briefly lifted a producer's milk check in November can just as quickly stop lifting it in December, and a lot of members had started planning around the higher number holding into the new year.
What actually moved, and why
The clearest explanation is the one we'd flagged as a risk two weeks ago — a rally built mostly on retail strength, arriving right as case counts and hospitalizations hit new records nationally after Thanksgiving travel. Foodservice demand, already thin, didn't recover to meet the retail pull, and enough buyers on both sides seem to have concluded the November number ran ahead of where actual demand could hold it. Butter followed a similar pattern, easing back from its own November high as processors kept churning into a market with more cream available than buyers wanted.
None of this is a crisis-level move, and it's smaller than some of the swings we tracked earlier in the pandemic. But it's a fast enough reversal that any pricing or production plan built on the November number four weeks ago is worth revisiting now, particularly if you locked in a forward price or committed volume assuming the rally would hold through the holidays.
The forecast already knew this was coming
What's notable is that federal forecasters had already trimmed their 2021 cheese and butter price outlook before this week's pullback showed up in the data, citing weaker expected demand and larger supplies coming into next year. That's a useful signal separate from the week-to-week noise: the people who watch this market for a living weren't betting on November's strength carrying forward, even before the numbers confirmed it.
For members who sell primarily through retail and direct channels, the practical takeaway is to keep an eye on the gap between your own order volume and the headline commodity number — they've been diverging all fall, and this week's reversal doesn't change that divergence so much as it removes some of the cushion the rally had briefly provided. For members still waiting on foodservice accounts to recover, there isn't much new comfort here, though there's at least a firmer date to watch now: federal regulators have a mid-December meeting set to weigh authorizing the first vaccine candidate, which is the first specific milestone anyone's had to point to for when a foodservice recovery might actually begin.
If you adjusted production or pricing based on the November rally, this is a reasonable week to double-check that plan against where the market actually sits now rather than where it stood two weeks ago. The Membership & Outreach Committee has been fielding these recalibration questions all fall and is a fair first call if you're not sure how to read your own numbers against this week's report.
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.