Editorial Comment Publisher/Editor

 

Eating More Milk And Drinking Less

Dick Groves
Publisher/Editor
Cheese Reporter Publishing Co., Inc.
dgroves@cheesereporter.com 608-316-3791

July 13, 2018

 

Mike Brown, director of dairy supply chain for The Kroger Company, may have come up with one of the more succinct and accurate “roadmaps” for the dairy industry during his presentation at the Wisconsin Dairy Products Association’s Dairy Symposium in Egg Harbor, WI, on Tuesday.

“We’re going to continue to eat more milk and drink less,” is what Brown said early in his presentation. Indeed, that’s not only a roadmap for the future but also a summary of what’s taken place in the recent past.

Let’s start with the “drink less” part of Brown’s comment. The decline in the fluid milk business has been well-documented in recent years, and can be illustrated with a couple of sets of statistics from USDA.

First, fluid milk sales have been fairly flat for decades, until declining quite dramatically in recent years. More specifically, fluid milk sales had reached a recent high of around 55 billion pounds in 2010, but by 2016 (the most recent year for which USDA statistics are available) had dropped to 49.7 billion pounds — their lowest level in decades.

The flat fluid milk sales up until a few years ago would seem to indicate that fluid milk was at least holding its own, but that ignores the fact that the US population continues to grow. And that point is reflected in per capita fluid milk consumption, which dropped from 292 pounds back in 1965 to 152 pounds in 2016.

(That 1965 figure might be a bit misleading; USDA figures for that year, and for the next decade or two, included not only fluid milk but also cream as well as yogurt and sour cream. However, the long-term decline in per capita milk consumption can be confirmed by the long-term flat beverage milk sales along with population increases, among other statistics.)

While it seems pretty safe to conclude that we’ll be drinking less milk, Brown did point out that Kroger sees growth opportunities in specialty beverages, pointing out that people will pay for fluid products that meet specific needs.

Among the products he mentioned: fairlife, the joint venture of Select Milk Producers and The Coca-Cola Company. And Brown isn’t the only one touting fairlife these days; a recent CoBank report noted that fairlife has experienced stronger growth than the combined plant-based “milk” sector since its introduction in 2015 (for more details, please see the story on page 7 of last week’s issue).

Other beverage milk products mentioned by Brown, CoBank or both as showing some potential included lactose-free milk, organic milk, grass-fed milk, flavored milk and a2 brand milk. But increases in all of these products will struggle to make up for the decline in sales of traditional, plain white milk.

As far as the “eat more milk” portion of Brown’s observation, well, the supporting statistics are pretty easy to find, especially when it comes to cheese.

For example, back in 1965, when per capita consumption of fluid milk and cream was close to 300 pounds, per capita cheese consumption was actually below 10 pounds (9.6 pounds, to be exact). And the US was producing less than 1.8 billion pounds of cheese annually.

In 2016, per capita cheese consumption reached a record 36.62 pounds, and in 2017, cheese production reached a record 12.66 billion pounds. Obviously, a lot of that milk previously consumed in liquid form is now being consumed in the form of cheese.

Yogurt also helps illustrate this “eat more milk” trend. USDA’s National Ag Statistics Service didn’t even start tracking yogurt production until 1989, when it totaled about 912 million pounds. Also in 1989, beverage milk sales totaled just under 55 billion pounds (almost exactly what they totaled in 2010), and per capita fluid milk consumption was 222 pounds (this number is just for beverage milk products, not the additional “fluid milk” figures reported for 1965 as explained earlier).

By 2016, per capita yogurt consumption had risen to 13.7 pounds (down from the record 14.9 pounds set in 2013 and 2014), and yogurt production last year totaled 4.48 billion pounds, up 0.4 percent from 2016 but still below 2014’s record output of 4.757 billion pounds.

So some of that milk previously consumed in beverage form is now being consumed in the form of yogurt, although not quite as much as a few years ago.

Looking at the “big picture,” it should be noted that, back in 2000, beverage milk sales reached 55.5 billion pounds, their highest level in well over 25 years and also the highest level since then. US milk production that year totaled 167.4 billion pounds.

In 2016, beverage milk sales dropped below 50 billion pounds, while US milk production reached a then-record 212.4 billion pounds. In other words, from 2000 to 2016, US milk production grew by 45 billion pounds while beverage milk sales declined by 5.8 billion pounds.

That’s due in part to products like cheese and yogurt, but it’s also due in part to exports. Certainly the “eat more milk and drink less” observation applies to the domestic market, but it really, really applies to the export market, simply because the US doesn’t really export any fluid milk.

But the US certainly exports a lot of manufactured dairy products, ranging from nonfat dry milk/skim milk powder and cheese to dried whey and lactose. Exports on a skim-solids basis rose from 751 million pounds in 2000 to 3.5 billion pounds in 2016, while exports on a fat basis increased from 1.6 billion pounds in 2000 to 8.4 billion pounds in 2016.

Mike Brown is correct: we will continue to eat more milk and drink less, and export milk in many forms, but not liquid.

 



Cheese Reporter welcomes letters to the editor. Comments should be sent to: Dick Groves by Fax at (608) 246-8431; or e-mail your comments to
dgroves @cheesereporter.com.

 

 

Dick Groves

Dick Groves has been publisher/editor of Cheese Reporter since 1989. He has over 35 years experience covering the dairy industry. His weekly editorial is read and referenced throughout the world.
For more information, call 608-316-3791 dgroves@cheesereporter.com
https://twitter.com/cheesereporter.


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