Hoard's Dairyman Editorial team

For every $1 of Dairy Checkoff funds dairy farmers invest in promotion, there was a return of $3.95 on enhancing fluid milk sales, $4.43 for cheese, and $6.26 for butter. Those were among the recent findings in USDA's latest report to Congress on the 15 cents per hundredweight that every dairy producer contributes toward dairy promotion efforts. In 2011, total collections netted $98.4 million.

When looking at the full impact on consumption, beverage milk sales were 5.8 percent higher than it would have been without dairy promotion efforts. Meanwhile, cheese grew 2.8 percent during the same time while butter was up 1.4 percent. Some may rightfully argue that fluid milk sales continue to follow a downward trend. However, this research estimates that lost sales would be even higher on the fluid front without promotion in what has become a very competitive beverage sector.

One other morsel of information contained in the exhaustive 150-page report was dairy farmers take of the retail dollar. It was 50.3 percent for fluid milk, 30.8 percent for cheese, 41.7 percent on butter and 29.6 percent for all other dairy products. So, in the case of cheese, dairy producers received 30.8 cents of every dollar while the remainder went to processors and retailers.

Economists at Texas A&M University led the external review of the Dairy Checkoff. It evaluated 2011 data because it takes time to estimate the full impact of promotional efforts. To review the entire report, click here.

(c) Hoard's Dairyman Intel 2013
September 3, 2013
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