Consumer preferences for food continue to evolve. For several decades, U.S. consumers switched away from foods that were higher in fat in an effort to create a healthier diet.

When it comes to dairy products, the consumer trend toward less fat was evident in all dairy product categories. However, during the last few years, consumers have moved back to higher fat content dairy products in search for better taste and perhaps from receiving more nutrition-related education about the role of fat in diets.

The switch to more butter in the diet has been well documented. The 1-pound increase in per capita butter consumption over the past 10 years highlights the growth in butter consumption that contrasts the longer term modest downtrend that had been occurring. But the story is much bigger than just the increase in butter consumption.

More than butter

The switch to higher fat products in other dairy categories is evident in recent data released by the Economic Research Service (ERS) of the U.S. Department of Agriculture. The recent data shows after 13 consecutive years of decline in whole milk fluid consumption, whole milk consumption rose by 1.5 billion pounds over the 2013 to 2016 period. Current data by the Agricultural Marketing Service (AMS) of the U.S. Department of Agriculture shows for the first half of 2017 whole milk consumption grew another 2.4 percent.

The switch is also occurring in other dairy products. The ERS data shows that regular ice cream consumption grew in 2015 and 2016 by more than 260 million pounds, turning a corner from what had been a long-term consumption decline.

The trend of increased consumption of higher fat dairy products is a welcome outcome for an industry that continues to expand milk supplies. The role that this trend has had on producer milk prices is large. The message remains clear that providing products that best meet consumer needs is a sure way to generate more value for your product. Producers must never forget that at the end of the day, the consumer’s opinion is the only one that matters.

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(c) Hoard's Dairyman Intel 2017
September 11, 2017
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