Dairy Supply Chains Need to Adjust to Changing Conditions, CoBank Says

COVID-19 is dramatically affecting consumer habits and dairy supply chains as food service demand plummets and grocery sales take off. Consumers struggling with job losses and economic uncertainty quickly returned to buying basic dairy products like fluid milk, commodity cheese, and butter. A new report from CoBank’s Knowledge Exchange indicates that consumer behavior will be different for the next 12 to 18 months than it was before COVID-19. As that behavior begins to become a habit, dairy supply chains will need to adjust from the farm to the fork.

“The dairy industry is coping with some new realities, largely driven by the decrease in foodservice demand and restaurant sales,” says Tanner Ehmke, manager of CoBank’s Knowledge Exchange. “The challenges for dairy supply chains will be adapting to focus on meeting the demand trends based on evolving consumer behavior as we navigate through an uneven reopening.”

Consumers increased their purchases of products that had fallen out of favor in recent years.

For example, processed cheese sales increased by 20% during the eight weeks ending on May 31. White milk sales gained more than 10% during the same period.

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