It Isn't All Bad News On Dairy
The dairy industry has had plenty of issues to drag our spirits down lately. Some of those items would include the fourth year of relatively low milk prices, trade wars, and a wet fall hampering fieldwork and subsequently degrading feed quality. On a dairy product front, fluid milk consumption that has been in decline for years, and recently we are blaming millennials for turning their backs on processed cheese.
How about some good news for a change?
USDA’s Economic Research Service (ERS) has recently released their estimates of per capita consumption of dairy products, and yes, you can see fluid milk and processed cheese taking a hit. The bloom is off the rose for Greek yogurt and ice cream sales, too.
But cheese consumption — what a superstar that product has been for us!
In 1970 we were eating just a little over 11 pounds per person each year. By 2017, our consumption had risen to more than 37 pounds per capita. That is more than a half-pound gain per year or a compound annual growth rate of 2.5 percent.
In 1970, our eating habits for cheese accounted for less than 25 percent of milk equivalent consumption of all dairy products. Today, it represents about 58 percent.
Believe this news cycle Don’t get depressed when a current news cycle is pounding you with data about picky consumers who don’t prefer cheese slices or the gooey processed product that some of us grew up on. Trust me, we are eating more cheese overall.
And, we can see the growth in most categories of cheese like Cheddar, Mozzarella, Muenster, Hispanic, and many of the specialty cheese varieties we now enjoy in our dairy case.
Did I mention butter?
Ever since the medical community declared a truce on animal fat, consumption of butter and butterfat sales in other dairy products has also been up. Your milk checks reflect this change. It used to be that about one-third of the component value was butterfat while the other two-thirds was the skim solids. Today, it is just the opposite.
The big picture is that our domestic sales of dairy products have been pretty good. We have had ups and downs in different product categories, but per capita sales of milk equivalent for all dairy products has been plodding upward and our population has been growing, too.
What does the future hold? If you are inclined to look for the dark cloud in this story, you might be thinking, “How much more cheese can we eat?”
The answer is “I don’t know.”
However, I can tell you that some countries like Germany or France consume more than 50 pounds of cheese per capita, so I’m not ready to prophesy that we’ve taken cheese about as far as it can go. I think that there is still growth in that segment, and the graphic doesn’t really show that our enthusiasm for the product is waning.
As we approach the holidays (serious cheese sales go from Thanksgiving through the Super Bowl), let’s remember that not all news is bad news. And don’t forget to put the cheese plate on the table or even to melt some processed cheese on your nachos for the game.
By: Mark Stephenson
Center For Dairy Profitability