What Price Healthy?

It’s an amazing time for dairy. The nation is in the middle of its latest better-for-you kick, this time propelled in part by increased pressure on food manufacturers and the restaurant industry to give consumers more information about what they’re eating.
And just at the right moment, it would seem like dairy is in possession of the goose that lays golden eggs: medical research linking consumption of dairy calcium to weight control in the context of a balanced diet and a reasonably active lifestyle.
You’d think that what’s good for the goose is also good for the gander. I mean, you have people who are yearning to be fit now being reintroduced to a substance that, in both food and beverage form, can be an effective weapon in the battle of the bulge. In the words of DMI’s Grant Prentice, “This weight-loss claim is the biggest claim to hit dairy news since pasteurization.”
So as processors are faced with this potential upswing in demand, they’ll be looking to their producers for more raw material. A rising tide raises all boats, and the forecast could be heralding a milky tidal wave.
But take a look at what’s been going on in the commodities market. Milk, butter, cheese — their prices are reaching historic highs. The mass media has been telling consumers to brace for spikes in supermarket prices of milk and other dairy foods.
Meanwhile, the National Milk Producers Federation has decided to extend Cooperatives Working Together (CWT), a voluntary program designed to boost farm milk prices through reduction of milk output and herd size.
Now, I don’t begrudge any business taking steps to increase its profitability. But as the “Healthy Weight” program gets off the ground amid other market factors, prolonging CWT seems ill advised.
Supply was already down due to last year’s low milk prices, along with strong beef prices. Higher feed prices, reduced production of Posilac and the ban on Canadian livestock after the mad cow scare are also in play. The last thing dairy needs from producers is OPEC-style production control.
Milk has already taken a back seat to other beverages for far too long. We know it has always been healthy, but it had no pizzazz, not to mention the commitment of marketing dollars like that of CokePepsiDrWhoever.
Plus, it costs more to quench your thirst. Why buy 12 ounces of milk for a buck when you can get 44 ounces of pop at a c-store for about the same money?
But recent years have seen new flavors, packaging and marketing campaigns, as demonstrated by this month’s Special Report, Focus Feature and our special section on this year’s Achieving Excellence winners. And the new weight-loss research — coupled with a nationwide obesity problem that has spawned anti-pop sentiment to the extent that soft-drink makers are coming up with their own dairy-based beverages so as not to lose their vending positions — just might get dairy close to turning the tide.
If your weight and overall health are on the line, maybe you’ll pay that little bit more for milk’s natural goodness.
A little bit more, yes. But how much more? With the extension of CWT and prices on the rise, we may soon find out. Milk’s already at a disadvantage, so even with “Healthy Weight” out of the barn, these price hikes come at a particularly bad time. They’re bound to wreak havoc on efforts to break fluid milk’s commodity mindset. With gold like this new research, now’s not a good time for prices to rise on a small-margin product many already think is too expensive.
As Craig Fullmer, director of dairy supply operations for Safeway, says in this month’s cover story, “When you have a volatile market, it’s pretty hard to convince the average consumer that you’re really shooting straight with them. I think they’re wondering what’s going on with these dairy guys.”
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