Dairy Report: Millennials Boost Natural Cheese & the Future of Class 7

Dairy Report 10-23
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The U.S. Mexico Canada Agreement (USMCA) focused on the repeal of the Canadian Class 7 pricing system.

The pricing program provides Canadian processors with a price advantage when it comes to selling certain classes of powdered milk to Canadian cheese makers. According to a report in Politico, there is a clause in the USMCA agreement that allows parts of the Class 7 program to survive in a lesser form.

Currently, Canada can lower prices to three key areas – the U.S., E.U. and New Zealand. A vote on the agreement will not be conducted until next year.

In the U.S., millennials are boosting natural cheese sales, eating three times more natural cheese than consumers in the 1970s. Consumption of processed cheese is on a downward trend, falling 0.75%. However, natural varieties of cheese have risen 1.54% over the past 20 years.

“Millennials can be category killers for a reason,” says Sara Dorland, economist with the Daily Dairy Report. “Processed cheese seems to be one of those products that millennials view with disdain, and this year’s most recent consumption data and CME trading volumes seem to confirm that sentiment.”