If you were watching the federal price data in January, you would not have bet on where the year ended up. Class III opened 2019 in the low fourteens, and by the time the December announcement came in it had climbed past nineteen dollars per hundredweight — one of the strongest closes in recent memory. We spent a lot of this year's newsletter on the anxious version of that story. It seems fair to spend one more issue on the calmer one.
Members who make cheddar and other Class III-priced hard styles felt this most directly, but the ripple reached the whole case. Distributors we talk to describe holiday order volume that finally matches the shelf space retailers set aside for it, instead of the thinner years we've had recently. A make-sheet decision looks different when the milk under it is worth more than it was, and a few members told us they're reworking January production plans they'd otherwise have left flat.
What carried it, and what didn't
None of this happened because of one clean cause, and we'd be doing you a disservice to pretend otherwise. Export demand held up better than expected for most of the year. Herd numbers came in lower than farmers wanted, which tightened supply from the other direction. And the trade picture, which spent most of 2019 looking unsettled, has been inching toward more certainty — enough that some members are already asking us what a finalized North American agreement would mean for the cheese lines they ship across the northern and southern borders. We don't have language to point you to yet. When we do, it will be in this newsletter and nowhere else first.
The strength wasn't a straight line even heading into this month. Trade reporting on cheese markets in the week before Thanksgiving described barrel cheese trading as "spotty," gaining a nickel one session before giving part of it back the next, even as barrels held above two dollars a pound for most of the stretch. That kind of choppy, headline-defying trading is normal once a market has run this far this fast — buyers get cautious, sellers get patient, and the number moves in both directions before it settles. It's a reminder that "milk turned around" describes the year, not any single week inside it.
None of this erases what a hard year it was for members who carry debt against a herd, or who watched a milk check barely cover a feed bill for most of the spring. A strong December average doesn't refund a rough June. If your operation is still working through decisions made during the leaner months — a loan restructured, a line trimmed, a plan shelved — that context doesn't disappear just because the year-end number looks better.
One date still on the calendar
The window to enroll in next year's federal dairy margin support program closes in the middle of this month. If you haven't made that call yet, don't let a good December talk you out of a decision that's really about protecting a bad one. Coverage is priced on what could go wrong, not what just went right.
We'll have a fuller look at 2019 in our next issue, including what members are telling us about how they're setting price on 2020 contracts. For now: a good year-end number is a real thing to be glad about, and a real thing to be careful with.
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.