Consumers continued shift to higher-fat milk in 2020, used 1.3% more fat vs. 2019

By Sherry Bunting

Fluid milk sales in 2020 were essentially unchanged from 2019, although 2020 had an extra day as a leap year, according to USDA data released this week.

Whole milk sales were the largest category of fluid milk sales in 2020 for the third consecutive year since surpassing 2% milk sales volume for the first time in decades in 2018. Compared with 2019 volumes, whole milk sales in 2020 were up 3.2% at 16.6 billion pounds, according to the annual USDA ERS report released Tuesday, Aug. 31.

At 15.8 billion pounds, 2% milk was the second highest volume category, up 3.5% from 2019. This marked the first year over year increase in 2% milk sales since 2010.

Sales of 1% low-fat milk fell 4.3% in 2020 to 5.8 billion pounds while fat-free sales volume fell 13.4% to 3 billion pounds, less than half of what it was in 2010.

Over the past three years, sales of flavored whole milk had been increasing annually back to levels seen in 2005, but dipped 2% lower than 2019 during 2020 at 765 million pounds.

Some this could be attributed to consumer purchase patterns, but also is a function of what processors and retailers choose to make and offer.

In the flavored milk category other than whole, sales volume was 2.9 billion pounds, down a whopping 33.3% — a combination of virtual schooling, reduced institutional feeding, consumers mixing their own at home, and other potential pandemic-related reasons.
In general, the overall trends held in 2020 as consumers continued showing their preference for milk with more fat. Egg nog sales, incidentally, were up a whopping 8.5% on a volume basis.

Some in the industry have said to me that if schoolchildren are provided with the choice of whole milk, there won’t be enough cream for all of the other products the dairy industry makes.

That doesn’t make sense. Taken together, the USDA ERS annual milk sales breakdown showed the continued consumer shifts to higher-fat fluid milk products increased cream usage by 1.3% overall in 2020 vs. 2019.

Despite this shift to more fluid category use of cream, the availability of cream last year dragged down milk prices, pushed butter churns, and contributed to the price divergences.

Producers made more butterfat than the market used, and the industry also imported record levels of butterfat in the March through August 2020 time frame and near record levels for the 12-month year on the whole.

Reports this week (Sept. 1, 2021) indicate this butter inventory built up in 2020, and the current steady production, will control butter prices that have been rising the past few weeks.
Butter inventory keeps milk price in check… mate.

The breakdown of all dairy product usage for 2020 will be released by USDA ERS on September 30.

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