Pockets of success and reasons for optimism
Posted 02/03/2020 by Marilyn Hershey
I do not like seeing neighbors and friends across the country exit the industry. We’ve faced unprecedented economic hardships the last few years and it’s forced some farmers to make their most unimaginable nightmare come true.
To make matters worse, we see headlines that speak of an industry in trouble amid two high-profile processor bankruptcies, and activists seemingly around every corner looking to disparage the way we farm and the products we produce.
I wish it could be as easy as saying to simply look away from the noise and stay focused on the things you can control, namely your farm and your family. But it sometimes becomes deafening and it’s hard to drown out.
Having said that, I want to start with a deep-breath moment: our dairy industry isn’t dying.
There are many pockets of success and optimism that I want to share with you, including those that are spurred by the dairy checkoff.
One of my favorite go-to proof points is the USDA’s per capita consumption chart. I want to go back to 1962 when the average person in the U.S. consumed about 647 pounds of dairy a year. That would be the last peak moment for some time as a shift in nutrition advice among other factors started a downward trend in dairy consumption.
It began picking up again over time and hit a stride in 1983, the year the checkoff went into effect. From 1983 to 2018, per capita consumption grew 73 pounds and we’re near 1962 levels again at 646 pounds.
Dairy Management Inc. uses data from the IRI research company that shows signs of strength for the category. First, did you know that 97 percent of American households contain dairy products? I can name many industries and companies that wish they had this sort of reach!
Have you seen where whole milk is back in style? It’s experienced growth the last three years and is the lead fluid milk product at retail with 40 percent volume share. White whole milk sales exceed sales of white 2 percent milk ($4.9 billion vs. $4.5 billion per year). Not to be forgotten is lactose-free milk, which was up 11.2 percent in volume sales in 2019.
While I know we have a concern about plant-based alternatives, consider these numbers: those products have about $2 billion a year in sales. Total sales of dairy milk in 2019 were $13.8 billion. Also, 93 percent of U.S. households purchase milk at least once a year, one of the highest penetration categories at retail.
Do you know what is taking the biggest share from fluid milk? IRI says it’s bottled water, which is growing thanks to innovation with flavors and sparkling and value-added offerings. Fifty-three percent of white milk switching losses were from bottled water, according to IRI.
I believe our industry has been hurt by a lack of innovation over the years. But, I have reason to be optimistic after seeing how DMI played a role in creating three innovative products last year: Shamrock Farms Rockin’ Protein Energy, Live Real Farms Milk Blends and Darigold FIT. Darigold FIT and another product – Organic Valley ultra-filtered milk – are examples of the catalytic impact taking place within the category based on the checkoff’s investment in fairlife and high-protein milk.
Speaking of fairlife, did you see where Coca-Cola has taken 100 percent ownership of the company after acquiring the remaining stake from Select Milk Producers? Think about that for a moment: one of the world’s most successful and iconic brands sees value in selling milk. If that doesn’t speak to the value of our category (and the importance of innovation), I’m not sure what will.
I truly believe that we’re turning the corner as an industry and better days are on the way. It certainly hasn’t been easy, and I always admire the resilience farmers have in weathering the worst that comes our way.
I also want to credit those who manage the 15-cent checkoff investment, locally and nationally. Our checkoff staffs have been at our side through it all and continue to show they are committed to finding new ways to promote the dairy industry and move the product, not just here but around the world.
The checkoff is an important factor why the industry is in better shape than some may perceive it to be.
If you want to talk about checkoff results, I encourage you to reach out to me through firstname.lastname@example.org or leave a comment below.
If you’d like to join the Facebook conversation about the national dairy checkoff, ask to join the Dairy Checkoff Farmer Group.