September 18, 2020 Markets & Management Update:
Each year in Aug/Sept., the USDA releases fluid milk sales and per capita consumption data for the previous year. The data is appended to a spreadsheet that shows historical numbers since 1975. It is quite interesting to look at the data and see how consumption and sales have changed over time. Some of the data is discouraging while other data is very positive. The numbers from 2019 continue this trend of mixed positives and negatives.
Fluid milk sales data is separated into eight categories including whole, reduced-fat, low-fat, skim, flavored whole, flavored other than whole, buttermilk, and eggnog. Eggnog sales are seasonal, but it is interesting to see how much of that category is enjoyed around Christmas. Fluid milk sales, overall, during the 45-year timeframe are down. In 1975, total fluid milk sales were 53.3 billion pound but dropped to 46.4 billion pounds in 2019. This represents a decrease of 13% in 45 years. However, there are some recent success stories.
Whole milk sales have increased year-over-year (YOY) since 2014 for a total increase of 12%, or 1.7 billion pounds, over the six-year period ending in 2019. 2014 sales were 13.8 billion pounds and increased to 16.1 billion pounds at the end of 2019. Flavored whole milk has increased YOY since 2015 (572 million pounds) for a total increase of 208 million pounds, or 36% growth in sales at the end of 2019 (780 million pounds). Eggnog is the smallest category, but it also has increased over the last five years. In 2015, eggnog sales totaled 126 million pounds. 2019 eggnog sales were 139 million pounds, a 10% increase during that timeframe. Unfortunately, the other five categories have been declining for several years and are driving the overall recent sales losses. Total 2019 fluid milk sales are down 1.8% or 828 million pounds from 2018.
Per capita consumption of total dairy products since 1975 has the opposite trend of fluid milk sales. Per capita consumption is the total pounds of dairy products, on a milk-fat, milk-equivalent basis, that the average person in the U.S. consumes each year. Basically, you can think of it as total dairy product sales divided by the U.S. population. Per capita consumption has increased from 539 pounds per person in 1975 to 653 pounds in 2019. This represents an overall increase of 21%. 2019 per capita consumption grew about 1% compared to 2018.
Of course, there are winners and losers on the consumption side. Fluid milk consumption has declined 43% since 1975. The average person drank about 29 gallons of milk per year in 1975 compared to 16.6 gallons in 2019. However, cheese, butter, and yogurt have been winners. Total cheese consumption in 2019 (40.4 pounds) was up 80% compared to 1975 (22.5 pounds), and butter consumption was up 32% from 1975 (4.7 pounds) compared to 2019 (6.2 pounds). The third winner has been yogurt. Yogurt consumption has increased 570% since 1975. The average person ate 2.0 pounds of yogurt in 1975, but in 2019, the average person ate 13.4 pounds of yogurt.
The industry has made some real gains over the last several years. Yes, fluid milk sales were down again in 2019, but whole and flavored whole milk sales have been increasing for several years. The fact of the matter is, per capita consumption of dairy is the highest it has been in several decades. Remember, every pound of milk cleared from the market, regardless of its form, benefits your milk check. The industry will turn fluid milk consumption around eventually.
The science for the health benefits are there, but it will take time for the average consumer and health professional to understand and accept it. In the meantime, keep in mind that over 95% of the households in the U.S. purchase dairy products.Read The Full Report