Retail Dairy Sales Strong, but Foodservice Slump Drives Dairy Surplus
Source: American Dairy Association
SYRACUSE, N.Y. – Sales of milk and dairy products have shifted dramatically over the last few weeks due to the widespread impact of COVID-19. Initially, retail sales surged as consumers stocked-up. Retail sales data for weeks ending March 15 and 27 show retail milk sales increased 44 and 42 percent, respectively, over the same period last year. This accounts for incremental sales increases of 22 million gallons per week. Currently, panic-buying conditions have lessened with stores occasionally experiencing temporary out-of-stocks due to delivery issues. Overall, retail milk sales remain strong and are a positive force for farmers and the industry. However, the big player in dairy product use is cheese. More than one-fourth of U.S. dairy production is used as cheese, and 50 percent of cheese is sold through foodservice channels, including restaurants, fast-food, institutions and schools. Our best data shows that depending on the type of foodservice, sales are currently down 30 to 60 percent due to ramifications of COVID-19. This sudden, drastic decrease in foodservice use is a major contributor to excess milk supplies in the marketplace. While many schools continue to serve meals, they’re serving only about 20 percent of the volume compared to when schools were in session. To address the rapidly changing market conditions, American Dairy Association North East deployed our retail staff to redirect their work in stores helping short-staffed retailer stores stock more than 54,400 dairy products throughout the region. They also contacted the major retail chains in our market area – representing about 1,400 stores – to confirm that orders to limit the quantities of milk shoppers can purchase have been removed. As more meals are being prepared and consumed in homes, we have increased traffic to our recipe website, SavorRecipes.com, highlighting meal solutions and snacks that feature dairy including Baking with Kids and Dine in Diner Style.