If you've spent this year on the production side, 2023 has probably felt tighter than the retail case would suggest. The federal margin coverage program built to backstop producers through this exact scenario has been paying out for eight straight months as of this fall, and forecasts going into the end of the year suggested more payments were likely before the calendar turned. That kind of run isn't a sign the program is being generous. It's a sign the underlying margin — what a producer actually clears after feed costs — has stayed thin for most of 2023.
At the same time, this is the week specialty counters start filling their holiday cases, and by most accounts our members are seeing steady or better foot traffic than last December. Gift boxes, wedge assortments, and holiday tasting flights move a lot of volume in a short window, and that volume is arriving on top of a year where artisan and specialty cheese has kept expanding its shelf space generally. Two things are true at once: producer margins have been squeezed by feed costs most of the year, and December demand at the retail end is real and currently strong.
Why the numbers don't cancel out
It's tempting to read "strong holiday sales" as good news that should offset a hard year of margins, and it isn't quite that simple. Retail demand helps producers who sell direct or who have pricing power with their distributor, but it does very little for the underlying cost structure a smaller creamery carried into every month this year. A wedge that sells briskly in December was still made with grain priced the way it was priced back in the spring or summer. If your margin coverage elections for next year haven't accounted for what feed actually cost you this year, now is a reasonable week to look at that math rather than assume the holiday bump means the year evened out on its own.
The other thing worth naming plainly: a strong December sales week is not a substitute for reading your own cost trend across the full year. If you run margin coverage or a similar program, this is the month annual figures firm up enough to judge whether your elected coverage level actually matched what happened, rather than what you guessed the previous January.
What we'd tell a member right now
If your cave is full and your case is moving, enjoy the week — it's earned, and it's also a large part of the reason the federation exists in the first place. But before you close the books on 2023, pull your actual feed cost per hundredweight for the year and compare it against whatever margin trigger you elected under the coverage program. If this year ran tighter than your coverage assumed, that's worth fixing before you re-enroll, not after next January's grain bill arrives on top of a holiday case that's already been sold down. Producers weighing a change to their coverage level for the coming year can also look at how their own margin swung month to month rather than relying on a single annual average, since a year that averages out fine on paper can still have carried real cash-flow strain in the months feed costs spiked hardest.
Members weighing a change to their coverage election for the coming year can find the current program details through the Membership & Outreach Committee, who keep a plain-language summary on hand for exactly this kind of year-end review, and who can also point you toward members in similar operations who've been through the same recalculation before.
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.