While the pandemic and its effects are by no means behind the United States, recent vaccine availability and slipping COVID-19 infection rates have caused many parts of the country to walk back policies meant to reduce human interaction and limit the spread of the disease. This doesn’t apply to all parts of the U.S., but many rural areas are opening restaurants and other food institutions again.

That raised a poignant question from an April 21 Hoard’s Dairyman DairyLivestream listener. They asked, “Has dairy demand looked different across the U.S. as states reopen at different times?”

While these numbers are hard to come by and even harder to link to actual product need, the Wisconsin Cheese Makers Association’s John Umhoefer explained that many of their dairy processing members don’t look at the country by region but rather by market.

“Where those distributors make sales are really up to them, and it’s really driven by the market,” he detailed. “I’m hearing food service is refilling the pipeline. That, to me, indicates wherever those restaurants are opening, our members report that their business is brisk. That’s true not just on that Cheddar side that’s going to retail, but also on the Italian styles, for example, that go into food service.”

Another demand influencer
While the domestic food service market has been difficult to follow and understand, another demand player has entered processor and distributor minds as cheese and butter markets have come into line with global values.

“The other thing that I would take note of that I think is going to play into some of this is that we’ve had prices of cheese and butter that are competitive at world markets, and that’s not always been the case,” shared the University of Wisconsin-Madison’s Mark Stephenson. “We have to begin to think a little bit about whether or not this has been happening long enough that we can make the product that we want or need to for export.”

To that end, Stephenson posed a few questions for processors to consider as they think about these markets. “Is that a real customer for us now? Can we put those into the packages? Are we going to have the containers for the ships that we will need to move the product out?” he asked.

While there are still many unknowns in terms of dairy demand, Stephenson was certain that reopenings of restaurants and some return to normalcy will be good for several dairy sectors that were significantly crippled by losses from restaurant sales.

An ongoing series of events
The next broadcast of DairyLivestream will be on Wednesday, May 5 at 11 a.m. CDT. Each episode is designed for panelists to answer over 30 minutes of audience questions. If you haven’t joined a DairyLivestream broadcast yet, register here. Registering once registers you for all future events.

To comment, email your remarks to intel@hoards.com.
(c) Hoard's Dairyman Intel 2021
April 26, 2021
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