Editorial Comment Publisher/Editor

 

 

Even In A Pandemic, Dairy Products Are A Great Bargain

Dick Groves
Publisher/Editor
Cheese Reporter

January 22, 2021


In 2020, the Consumer Price Index for dairy and related products increased by 4.4 percent, its largest percentage increase since 2011. And December’s dairy CPI was a record-high 231.74 (1982-84=100).

So do these figures mean that dairy products are no longer a bargain for consumers?

Hardly. Indeed, it’s safe to say that, here in early 2021, dairy products remain a great bargain for consumers. Some dairy CPI history and some current CPI data will help put this in perspective.

For starters, while the dairy CPI in 2020 posted its largest percentage increase in almost a decade, it’s worth noting that the dairy CPI has actually been relatively flat in recent years.

Indeed, following a 6.8-percent rise in the dairy CPI back in 2011, the dairy CPI actually declined three times (in 2015, 2016 and 2018) and increased by just 0.1 percent in two other years (2013 and 2017). Only in 2012 (2.1 percent) and in 2014 (3.6 percent) did the dairy CPI rise by more than 1 percent.

Yes, the dairy CPI did reach a record high in December 2020, and actually set three new records last year, initially reaching 230.2 in May, then hitting 231.2 in August and finally reaching 231.74 in December. But before hitting 230.2 in May 2020, the record high for the dairy CPI, 229.9, was actually set back in December 2014.

That means, obviously, that the dairy CPI failed, for more than five years, to break the record high set at the end of 2014. In fact, from February 2016 to September 2019, the dairy CPI never even got above 220, meaning that not only did the dairy CPI not set any new record highs during that period, it didn’t even come close.

At 231.74 in December, the dairy CPI remained well below numerous food-related price indices. December’s CPI for food stood at 270.0, while the CPI for food at home was 251.3, the CPI for cereals and bakery products was 283.7, and the CPI for fruits and vegetables was 306.5.

The federal government includes meats, poultry, fish and eggs in a “protein foods” group, along with beans, peas, and lentils; and nuts, seeds, and soy products. The CPI for meats, poultry, fish, and eggs stood at 264.5 in December, meaning that dairy products would seem to be a better protein value than some other animal-derived foods.

Another way to look at what a great bargain dairy products are for consumers is to look at average price data which, along with the CPI, is also collected and reported by the US Bureau of Labor Statistics. In December, the average retail price for a pound of Cheddar cheese was $5.54, the eighth straight month in which the average retail Cheddar price topped $5.50 a pound.

That $5.54 average was also the highest retail Cheddar price for the month of December since 2012, when it was $5.87 a pound.

Yes, retail Cheddar prices were relatively high in 2020, but comparisons can be deceiving because retail Cheddar prices were relatively low for several years before 2020. For example, back in 2014, the average retail Cheddar price was above $5.50 a pound for nine straight months, including a high of $5.73 in April.

But, after October 2014, when they averaged $5.57 a pound, average retail Cheddar prices didn’t make it back to the $5.50 per pound mark again until May of 2020. In fact, they actually were below $5.00 a pound for the final two months of 2016 and all but three months in 2017.

So from the perspective of the past decade, retail Cheddar prices in 2020 were still a bargain.

Meanwhile, the average price for a gallon of whole milk in December was $3.54, up almost 35 cents from a year earlier and the highest average retail whole milk price for the month of December since 2014, when retail whole milk prices averaged $3.82 per gallon.

As was also the case with Cheddar cheese, 2020 retail whole milk prices look high in comparison to recent years, but fall well short of where they were if you go back to 2015 or earlier. While January 2015 was the last time retail whole milk prices averaged above $3.50 a gallon until December 2020, prior to January 2015, whole milk prices were above that level quite often.

Specifically, retail whole milk prices averaged above $3.50 per gallon every month in 2014, including a record high of $3.86 a gallon in November 2014, and were above $3.50 a gallon for at least two months in 2011, 2012 and 2013. Indeed, in both 2011 and 2012, the average retail price for a gallon of whole milk peaked at a level higher than it did in 2020 ($3.72 and $3.58 a gallon, respectively).

Finally, it’s worth remembering that, whatever the price, dairy products offer consumers an impressive “bang for the buck” from a nutritional standpoint. Many if not most dairy products are nutrient-dense foods, meaning they deliver not only great flavor but also protein, fat and a variety of vitamins and minerals.

Here’s how the National Dairy Council put it, in comments submitted last August on the Dietary Guidelines Advisory Committee’s report: “Dairy foods are the lowest cost sources of dietary calcium and vitamin D in the US diet and are among the lowest cost sources of potassium, magnesium, vitamin A, riboflavin (B2) and vitamin B12 as well.”

Consumers abandoning dairy in favor of plant-based alternatives might want to consider how much nutrition they’re getting for the price before making the switch.

Inflation returned to the dairy case last year, but dairy products remain a nutritional and flavor bargain for consumers.

 

Dick Groves

Dick Groves has been publisher/editor of Cheese Reporter since 1989. He has over 40 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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