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Retail Demand for Dairy Products Up 10%

AgDay TV

October 2, 2020

Who can forget the videos of farmers forced to dump milk as the COVID-19 pandemic dramatically cut into demand at restaurants and schools? And while that side of the equation hasn’t fully improved, according to the International Dairy Foods Association, retail demand is up 10%.

“If we look at what the markets are telling us, we saw $2 cheese when [the pandemic first began]. During the height of all of this, we got down to $1 cheese and we’ve been back to $3 cheese, so we have a strong demand for dairy products, and some of those are in tight supply right now,” says Michael Dykes, CEO of the International Dairy Foods Association.

There is a third component contributing to the higher retail demand – exports.

“We’ve seen a 14% increase in exports [compared] to this time last year,” Dykes says. “About a 16% increase in volume and a 14% increase in value.”

Growth has come from an increase of nonfat dry milk. Skim milk powder exports to southeast Asia have seen a boost along with whey exports to China. However, shipments to Mexico continue to trail behind levels seen last year.

“In comparison to last year, we’ve seen about 164,000 metric tons of more exports sold this year in terms of volume,” says Tom Vilsack, CEO of the U.S. Dairy Export Council.

“That’s about $494 million worth of value increase since last year. More milk solids are going into the export market, which is good for farmers.”

According to Vilsack, China has added nearly 14,000 new hog farms this year, which is an excellent market for whey.



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