Here is the charge: “The Chicago Mercantile Exchange cash cheese market is responsible for the failure of milk prices over the last several years.” Those making the charge claim the CME is “thin” with less than 1 percent of cheese priced through its market. Other charges include shady prices when there is no trade (unfilled higher bids and uncovered lower offers) and few market players. Those two elements combined result in the opportunity, if not actuality, of cheese price manipulation and, through that, milk.

The CME and its supporters respond that the cash cheese market represents a perfectly honest method to handle the spot market needs by being a market of last resort for buyers and sellers of cheese. It reports actual activity and represents a price for spot cheese and nothing more. What others do with the information is their choice.

Many dairy producers think through their business decisions using some kind of “what if” scenario. For example, “what if I change the ration, and then hot weather hits?” It’s a type of thinking that helps to remove the emotional bias. This method weighs the pros and cons of a decision by projecting a real dollars-and-cents outcome.

Partial budgets are a handy tool that can help you make specific decisions about your dairy. They can be performed on a multitude of decisions, including feed program changes, reproduction programs, cropping operation’s enterprise effects on the dairy and so on. The economic power these that spreadsheets (or handwritten budgets) have on a dairy can be a very useful, and sometimes eye-opening, event.