U.S. dairy has a great future
Dairy consumption is growing every year
Photo courtesy of Chinnapong / iStock / Getty Images Plus
This summer, I had the pleasure of attending the Michigan AgroExpo show to talk about the political and economic trends shaping the dairy business environment. My main message was this: Despite challenges such as avian influenza, ongoing Federal Order reform, and a weak export outlook, the fundamentals of U.S. dairy remain as strong as ever.
First, I covered consumer demand. According to CoBank, refrigerated and frozen dairy has grown into the largest category in retail with $76 billion in sales. Dairy consumption is growing each year and innovations in healthy snacking occasions are opening new opportunities for growth. Outside of the 2020 pandemic, fluid milk sales are positive for the first time in 15 years, driven by lactose-free, value-added milk, and private-label whole and 2% reduced fat milk. And, despite inflationary pressures across all categories of food and beverage, dairy remains one of the most affordable, nutritious options for shoppers and foodservice customers.
Steady demand is being met by significant investment. Dairy companies are investing more than $8 billion in more than two dozen states to modernize operations and expand capacity. As U.S. manufacturing grows in a tight labor market, lessons learned during the pandemic are filtering into plant design. Processors are embracing technology, including automation, machine learning, and artificial intelligence to enhance safety, quality, and efficiency in their plants.
Supply chain improvements are driving greater efficiency, which is leading to sustainability gains. Investments are moving to new parts of the U.S. as the industry confronts new realities. For example, some areas of the country are attracting investment with renewable energy and plentiful water; in other areas, electricity, water, and labor are more expensive and not as reliable.
Meanwhile, U.S. milk production has withstood weather, supply chain breakdowns, a global pandemic, market fluctuations, and new animal disease outbreaks to remain consistent and reliable. The value of milk components is rising, creating new and exciting opportunities for dairy ingredients to deliver health and wellness to consumers around the world. The federal government’s impending resolution of Federal Order pricing seems to acknowledge manufacturing cost increases and a growing market for ESL (extended shelf life) milk promises to unlock even greater potential across the dairy supply chain.
As the dairy industry evolves, IDFA is focused on advocating for policies to remove barriers, harness innovation, create growth opportunities for members, prepare for the next generation of leadership, and expand opportunities for women in our dairy industry. There will be a new leader in the White House come January 2025 and the margins in Congress will remain razor thin. Once new leaders are place, it is essential for IDFA and our members to engage, meet new political and policy leaders, and share data highlighting dairy’s positive contributions to health, local communities, and our nation’s economy.
Engaging also means building durable relationships with lawmakers, collaborating with regulators, and using our grassroots advocacy to influence state and federal policies. I encourage you to become an IDFA grassroots advocate today by visiting the IDFA Campaign Center on our website. IDFA grassroots advocates number in the thousands, allowing us to make an impact for you and your business.
The next year promises to be an exciting one for U.S. dairy. IDFA will remain focused on delivering impact for our members: growing markets here and abroad, supporting innovation across the supply chain, advocating for pro-growth policies, and unlocking new opportunities to connect the goodness of dairy with all consumers.
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