Doing a Deep Dive into U.S. Dairy Consumption

It’s no secret that the dairy sector has been struggling with low milk prices for years, but does that tell the whole story?  Agricultural Economic Insights took a deep dive into the U.S. dairy industry in the face of rising bankruptcies among small farmers and big milk processors like Dean Foods.

Fluid milk consumption per capita in the U.S. has been falling for decades.  However, consumers are actually buying more dairy goods overall, including more butter and cheese.  Cheese consumption per capita has doubled since 1975, with mozzarella and cheddar each representing about 30% of consumption in 2018.  Butter consumption has grown by a third since 2001 and a Politico article says part of that surge comes because fat has lost some of its stigma among dietary health advocates.

Per-capita yogurt consumption was steadily climbing up till 2014 before dropping over the past five years.  Fluid milk consumption dropped more than 40% since 1975, or about 1.2% per year.

In the meantime, alternatives like almond and soymilk have grown in popularity. Overall, the dairy industry is primarily driven by slow rates of changes unfolding over several decades,” said AEI farm economist David Widmar. Farm bankruptcies in the dairy industry jumped by nearly 20 percent in 2019.

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