At 30 percent market share, Class I utilization reached a new modern day low. When looking back over the past 14 years, Class I utilization for beverage milk was as high as 44 percent in 2004. However, those numbers have slowly slipped since then.

Of course, Class I utilization matters to dairy farmers because that’s the highest value of milk in terms of returns to milk checks based on Federal Milk Marketing Order pricing provisions.

For the most recent year, the Federal Milk Marketing Order data was based on 135.5 billion pounds of milk or 63 percent of the milk supply. Of course, California is not represented in the federal order system and the Golden State has even lower Class I use, which would drop the 30 percent figure even lower.

While Class III use for cheese has grown to some degree, Class IV butter and powder has shown the strongest growth trends in recent years. For 2017, that market consumed 15 percent of the nation’s milk while Class III stood at 41 percent.

Rounding out the category was Class II at 13 percent. That is federal order milk that goes for soft products such as soft cheese, yogurt, and ice cream.

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(c) Hoard's Dairyman Intel 2018
March 5, 2018
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