June 1, 2020

Did COVID-19 Secure Increased Retail Demand for Dairy?

Top Story  |   |  By: Anna-Lisa Laca

It’s no secret that demand for milk, cheese, butter and yogurt surged in early March as panic buying ensued and states started sheltering in place. While some of those restrictions have eased and restaurants are beginning the process of opening back up, many analysts have wondered if retail demand would be sustained or would weaken. According to data acquired by the National Milk Producers Federation (NMPF), consumers that stocked up on dairy in March continue to buy retail dairy products at “disproportionately high levels.”

“From March 8 to March 22, as stay-at-home orders and business closures proliferated nationwide, dairy products flew from store shelves,” NMPF explained in an episode of their podcast Dairy Defined. “Milk sales were 43% higher than during the same period a year earlier. Yogurt rose 31%. Ice cream sales gained 40% and cheese 76%. Butter sales more than doubled during the same period.” 

According to IRI, a retail research firm, retail dairy sales from late March through May 17 remain 25% higher than a year ago. Meanwhile, overall grocery sales during that same period are only up 14% -- meaning that at a time when people are relying more on grocers to fill their needs, they’re relying on dairy significantly more than they are on other products, NMPF says. 

Still, there are challenges ahead. Before the pandemic, more than half of U.S. dairy consumption happened outside the home, whether that be in restaurants or schools. That turbulence prompted sharp declines in the USDA’s forecast for milk prices for 2020. While restaurants are reopening, schools will be out for the remainder of the summer. The markets are still trying to overcome losses. 

“A recent price rally is changing the outlook from mortifying to merely difficult – still cold comfort for many producers, but more manageable in a way many wouldn’t have dared to wish for even one month ago,” NMPF notes.

While the future remains unclear, dairy is resilient, says NMPF. 

“Today is World Milk Day. While there remains much to overcome, there is also much to celebrate,” they said. “Raise a glass.”