Fluid milk was once the undisputed king of the dairy aisle. That is no longer the case as cheese passed the milk jug a decade ago. Given the current trajectory, dairy exports could also pass the former lead car by the end of this decade, too. If the Class I category continues to trail off in consumers' minds, promotion and research budgets also may need to follow suit.

Since peaking at 44.6 gallons per person at the end of WWII, fluid milk sales have dropped precipitously over the ensuing seven decades. The situation has gotten so dire that beverage milk consumption evaporated to a paltry 20 gallons per person last year. As a result, fluid milk's share fell from 44 percent of the bulk tank in 1970 to a mere 20 percent last year.

During this time, cheese steadily grew its market share and now soaks up 27 percent of domestic milk production. Dairy exports are on pace to repeat this course. When the U.S. Dairy Export Council came onto the scene in the mid-1990s, America shipped the equivalent of 3 to 4 percent of its production overseas. One decade later, international dairy sales swelled to 9 percent and continued that trajectory, topping out at 15.3 percent last year as shown in the chart. If those trend lines continue, it may not be long before exports push Class I fluid milk into third place.

Whether or not that leapfrogging projection comes to fruition isn't the pressing issue. What should give everyone pause is whether or not we redirect more dairy promotion and research dollars into the dairy product growth categories. Additionally, does there come a point in time that pay price formulas get updated to better reflect consumer demand?

These are the questions that industry leaders and all dairy farmers should be asking. While we support the recent doubled-down efforts on reinventing the fluid category, at a certain point we must move on and recognize that the battle for the human stomach is overflowing with fluid competitors, and restoring the glory of fluid milk just might be a lost cause.

This editorial appears on page 596 of the September 25, 2015 issue of Hoard's Dairyman.

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