Federal cold storage figures released this week show natural cheese stocks sitting well above where they usually run for this time of year, the tail end of a buildup that started back in March when food service demand disappeared almost overnight and production didn't slow down nearly as fast. By mid-April, spot cheddar had fallen to its lowest price in roughly seventeen years as plants kept running near capacity with nowhere for the extra cheese to go but into a warehouse. A few members in the sales and logistics side of our membership told us this week that the number itself isn't the surprise. What's landing harder is how slowly a backlog that size is likely to clear, with some estimates putting a return to normal inventory levels closer to the end of the year than the end of summer.
That matters differently depending on where you sit in the supply chain. If you sell fresh or short-aged cheese, a warehouse backlog upstream mostly shows up as pressure on the price you're offered, since a buyer sitting on excess inventory has less urgency to take your next batch at last month's number. If you make something that's supposed to sit for months anyway, an aged cheddar or a washed-rind that needs real cave time, the backlog is a more direct problem: warehouse space that would normally free up for your product is occupied by wheels nobody's ready to move, and a few members have reported longer waits and higher storage quotes than they budgeted for this spring.
Reading a federal purchase program correctly
A federal purchasing program aimed at working through some of this oversupply began placing large contracted orders this month, and it's genuinely helping — several members told us it's the first buyer showing up with real volume in weeks. But it's worth being precise about what that program is and isn't. It's a defined purchase window with defined specifications, not a permanent new customer, and the cheese moving through it is mostly commodity block and barrel rather than the smaller-batch specialty product a lot of our membership makes. If your product doesn't fit the program's spec sheet, the purchasing itself won't directly reach you, even though it may ease pressure on the broader market you're selling into indirectly, by pulling volume off warehouse shelves that would otherwise keep sitting there.
There's a second wrinkle worth naming: a purchase program built around a defined window creates its own kind of cliff. Several members who sell primarily into commodity channels told us they're already thinking about what happens to the board the week that program's contracted orders stop landing, especially if food-service demand still hasn't recovered enough by then to pick up the slack. We don't have a confident forecast for that, and we're wary of anyone who claims they do this far out. What we'd say instead is: don't build a pricing plan for the back half of the year around this month's temporary lift continuing indefinitely.
What we'd suggest for members holding aged product
If you're sitting on inventory that needs months more cave time regardless of what the market does this quarter, our sense from talking with members who've been through a slow-clearing glut before is that the worst move is panic-selling into a soft spot just to free up space. A short conversation with your distributor or your bank about bridging storage costs for a few more months is usually cheaper than discounting a wheel that was never going to be ready to sell yet anyway.
It's also worth checking your own storage contract now rather than when you actually need the extra space. A few members told us their warehouse relationships tightened up availability with very little notice once the backlog became public knowledge, and locking in terms early, even for space you're not using yet, turned out to be worth the modest carrying cost. If you need a hand thinking through that math, or comparing notes with someone who's negotiated a storage contract recently, the Membership & Outreach Committee has been fielding calls on exactly this and can connect you with members who've worked through it.
We'll keep watching the monthly cold storage releases and reporting back on whether the backlog is actually narrowing or just moving around the supply chain from one warehouse to another.
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.