When It Comes To Milk Prices, Domestic Dairy Demand Matters
It’s no secret the dairy industry is walking through a global glut of milk. While most of the conversation about overcoming the poor prices currently plaguing the industry is centered on boosting exports, Mike Opperman, editor of Farm Journal’s MILK, says not to overlook domestic demand.
“85% of the milk stays home,” he told AgriTalk After the Bell host Chip Flory on Friday. “Domestic demand has to be a huge part of getting rid of some of the supply.”
While domestic demand has been on a downward trend for several years, some product categories have begun trending upward, Opperman says.
“Since 2000, we’re down 43 pounds of fluid milk per capita,” he says adding that a positive uptick in fluid demand could significantly impact milk prices. “But, we’ve almost doubled consumption of yogurt in the same time frame.”
Similarly, domestic demand for cheese has increased, thanks in part to the work Dairy Management Inc. is doing with retailers on behalf of farmers.
“They are increasing demand by working with Pizza Hut, Dominos, Taco Bell and others to add more cheese to their menus,” he says.
Demand could continue to strengthen as the economy improves.
“We’ll see a bump in demand when people have more change in their pocket,” Opperman says. “But the bigger thing is families ordering a pizza or gooing out to a restaurant. Certainly a better economy helps all of that.”
Listen to the full interview below: