DMI: 2020 A Better Year For Dairy Than Many Expected

Much to the surprise of many in the industry back in March and April, 2020 has been a good year for the U.S. dairy industry, according to Tom Gallagher, CEO of Dairy Management Incorporated. He said the U.S. dairy industry is on its way to a record year for export volume. Data through the first ten months of the year show the industry is on track to ship more than two million tons of milk solids in a single year, which would be a first. Gallagher said the September dairy sales numbers show how important exports were to the industry in 2020.

“Domestic and exports combined were up 1.2% for about 2.7 million pounds. I think if anyone had placed a bet on that last March, the people with the 1.2% would have won that bet. I think people were never going to guess that we’d be at that level. Now, domestic through September was down 1%,, and exports were up 15.1%."

Gallagher said after the difficulties created by COVID-19, domestic sales down by only 1% is a win.

“I think we will finish the year in positive territory domestically if cheese keeps going the way it’s been going. I’d say there are four reasons on the domestic front; one is the work we did with pizza. We did a Papa John’s promotion deal. We did a deal on Domino’s to reward kids who missed their graduation, so to speak.”

He added working with pizza companies to develop “contactless delivery” turned out to be a good move for the dairy checkoff and the overall dairy industry.

“We continued to press them to introduce new products, and all of this is aimed at overcoming what we lost at restaurants. And the third area is GENYOUth and their work in schools. They collected 17 million dollars so far this year from non-dairy sources to keep the school feeding programs going locally, which means great things for kids and continued sales for dairy farmers. That channel didn’t go as low as it otherwise could have. And the fourth area is the work in hunger that the state, regional, and national staffs did to help divert some of the food over to the hunger channels and the food banks. Setting aside retail, which we know did well but nowhere near well enough to offset the loss at restaurants, those are the four reasons that number is almost flat domestically, and it’s going to move into positive territory.”

Gallagher added in 2020, the dairy checkoff took an unusual step of promoting itself to younger Americans through the popular online game Minecraft. And he said the move was more successful than they expected.

“It’s aimed at a sustainability message to Gen Z people, using very popular gamers like ‘Mr. Beast’ to use their influence to explain farming and sustainability within the game ‘Minecraft.’ We had 12 million views of their videos. Mr. Beast’s video was the number one trending video on YouTube Gaming for 24 hours. He has 75 million followers. From an influencer standpoint, he was so excited about what he learned on the farm when he did a virtual tour himself to set up his game that he put $50,000 of his own money up as a prize to the gamers that played the game, so that was very successful,” Gallagher pointed out.

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