In the cheese and dairy market, prices can swing fairly often due to various factors—from shifts in milk production to supply chain disruptions and seasonal demand. Whether prices are currently rising or falling, food ingredient procurement managers, production planners and plant managers need strategies to stay ahead. We are here to help you find the best opportunities in the market to beat your budget and protect your margins.

Understanding Cheese and Dairy Market Fluctuations

You never need to look far to see the dynamic influences that can push and pull cheese, butter and other dairy ingredient prices. In 2024, for example, bird flu infected cows for the first time, causing a material reduction in milk yield; at the same time, GLP-1 drugs and inflation continued to put downward pressure on consumer demand. In spite of these variables, outside pressures and low margins, dairy farmers continued to outperform by producing milk with more fat and protein than ever before.

Whether prices are trending up or down, it is important to have a proactive strategy in place.

Strategies for When Prices are at Extremes

High Priced Market Conditions:

• Hand to Mouth: Often acute shortages of fresh products can lead to short but violent price rallies. Try to work off of existing inventory when possible.
• Dynamic Inventory Management:  Look for ways to widen specifications without sacrificing quality. Considering alternative packaging types may also give you access to products priced at a discount to your traditional supply.
• Diversify Suppliers: Expand your supplier network to mitigate risks of price spikes from a single source.

Low Price Market Conditions:

• Strategic Stockpiling: Identify price points and product age limits so you are ready to accumulate inventory at a price that leads to a positive margin down the road.
• Lock in  future rates: Working with a trading company like Ingredient Exchange allows you to lock in flat rates for future deliveries. In this case, you will need to determine the product type and age profile, and work with a trusted partner who will follow through on delivering the product, no matter how the market evolves.

How Ingredient Exchange Supports You

Ingredient Exchange offers solutions that help you navigate both high and low market conditions:

• Market Intelligence: We use industry insights to help you make informed purchasing decisions based on real-time market trends.
• Increasing Product Flexibility: We provide suggestions to expand age profiles or packaging options that have helped other food manufacturers cast a wider net when looking to save money.
• Risk Mitigation: We help you balance inventory levels to avoid overstocking or shortages, reducing financial and operational risks.

Why a Proactive Strategy Matters

Waiting for the market to stabilize can cost your business valuable opportunities. A proactive procurement and storage strategy offers several advantages:

• Cost Control: Manage purchasing decisions to align with your budget goals, whether prices are rising or falling.
• Operational Flexibility: Adapt quickly to market changes without disrupting production or storage capacity.
• Competitive Advantage: Stay ahead of competitors by securing favorable pricing and ensuring consistent product availability.

Partner with Ingredient Exchange for Long-Term Success

No matter which way the market turns, Ingredient Exchange is prepared to help you navigate price fluctuations and supply challenges. Our support ensures you can make informed purchasing decisions, maintain efficient operations, and protect your bottom line.

Ready to Strengthen Your Strategy?

Contact Ingredient Exchange today to learn how we can help you create a plan to manage rising and falling cheese prices with confidence. Let us help you turn market challenges into opportunities for growth.