February 26, 2019

Consumers More Often Turn To Whole Milk

 |  By: Fran Howard

The renewed popularity of full-fat dairy products can be seen in annual milk sales data released recently by USDA’s Agricultural Marketing Service (AMS). While sales of total packaged fluid milk products continue to decline, sales of whole milk and milk-based beverages, as well as designer milks, such as flavored, high-protein, and lactose-free, continue to grow—just not enough to offset the long-term decline in fluid milk consumption.

“Last year’s decline in total milk sales of nearly 2.1% was the second largest year-over-year drop since USDA started reporting monthly estimated total U.S. sales in January 2000,” says Bob Yonkers, dairy economist and analyst for the Daily Dairy Report. “Last year’s drop was second only to 2014, when sales fell 3%.”

While the total decline might not seem insurmountable, the accumulative effect is startling. “Since 2009, daily milk sales have fallen by more than 22 million pounds, the equivalent of nearly 2.6 million fewer gallons of fluid milk sold each day,” Yonkers notes. “Whole milk sales, however, have been climbing since 2012. Prior to that, whole milk sales had been in a long-term decline.”

The same cannot be said for nonfat milk, formerly called skim, he says. “Last year, sales of nonfat milk fell a steep 9.8%, their largest decline since 2000,” Yonkers notes. “The trends in skim and whole milk also held for both organic and conventional fluid products.” Organic whole milk sales rose 5%, conventional whole milk sales advanced 0.6%, organic nonfat milk sales fell 14.8%, and conventional nonfat milk dropped 9.8%, compared to 2017 levels, according to AMS data.

The renewed popularity of whole milk can be attributed in part to growing demand for flavored whole milks. According to reports from USDA’s Economic Research Service (ERS), between 2009 and 2016, the average fluid milk plant’s annual fluid product volume fell by 20.5%. “The drop was due to lower fluid sales nationally as well as an increase in total fluid milk plants, particularly smaller-volume plants that produce niche products that are growing in popularity,” Yonkers says.

The trend toward increasing sales of whole milk products could accelerate if the recently introduced bipartisan Whole Milk for Healthy Kids Act is eventually enacted. The House bill introduced by Rep. Glenn Thompson (R-Penn.) has 14 co-sponsors, including House Agriculture Committee Chair Collin Peterson (D-Minn). If signed into law, the bill would once again make whole milk a staple for the 30.4 million kids enrolled in the National School Lunch Program (NSLP). 

Moreover, the Whole Milk for Healthy Kids Act would continue the process of reversing the 2010 Healthy, Hunger-Free Kids Act, which directed USDA to rewrite the NSLP nutrition standards. Changes to the standards included making water available at every meal and lowering allowable sodium, fat, and sugar intakes. In 2013, low-fat flavored milks were removed from NSLP options due to their high sugar content. But low-fat flavored milks returned to school cafeterias under the 2017 School Milk Nutrition Act. 

According to MilkPEP, Kids between the ages of 2 and 17 account for 40% of total U.S. milk consumption. Thus, increasing consumption among this group by offering the type of milk kids generally gravitate toward could help slow the long-term decline in total fluid milk consumption, Yonkers says.