Eggnog, Cookies, and other High-Fat Holiday Products Help to Support Butter Prices

Annual sales of eggnog typically hover around 16.3 million gallons.
Annual sales of eggnog typically hover around 16.3 million gallons.
(Pixabay)

Butter, no doubt, is the big kahuna of the holiday season, but other lesser-known Class I and II dairy products also play prominent roles in many seasonal traditions. Many of these products are also high in fat, offering Americans all of the comforts they crave during the holiday season, according to Betty Berning, analyst with the Daily Dairy Report

“The shift toward high-fat dairy products is a multi-year trend that has likely accelerated due to the pandemic,” Berning says. “Milkfat consumption also typically picks up during the year-end holidays.”

For example, Eggnog, a decadent Class I product, might be one of the most iconic holiday dairy products, and grocers today carry many offshoots of the original. “Many extensions exist in the eggnog category, including newer non-dairy eggnogs such as those made with almond and soy, which provide competition to a category that dairy once owned,” she says. “Organic and lactose-free eggnogs can also be found on many grocery stores shelves. And Southern Comfort, a popular addition to eggnog, even offers its own eggnog mix.” 

Annual sales of eggnog typically hover around 16.3 million gallons. “Traditional eggnog as well as many of the product extensions are heavy on cream,” Berning notes. “This again plays into consumers’ desires to enjoy indulgent products, at the same time it soaks up some of the extra cream in the market.”

During the holiday season, milk and butter-rich cookies are also offered as a treat to Santa in homes across the country, but this year, Mr. Claus could go hungry, Berning says. TopData estimates that since the start of the pandemic, cookie consumption is up 25%. And Campbell Soup, owner of Pepperidge Farm cookies, anticipates a possible cookie shortage this holiday season due to increased demand. 

“During this challenging year, consumers have also turned to comfort foods like ice cream,” Berning states. For the first 10 months of the year, year-over-year production of regular hard ice cream—a made-for-demand product—climbed 3.3% to 635 million gallons, according to USDA. IRI data for the 52 weeks ending Sept. 6, showed a remarkable 13.4% sales increase for ice cream and sherbets, compared to the same week in 2019. 

“Not only will many of this year’s holiday pies will be topped with ice cream or whipped cream, the overall trend toward increased ice cream intake will likely continue as consumers, who are stuck at home in many states, look to affordable indulgences to make pandemic restrictions more palatable,” she adds. 

Similarly, 2020 production of sour cream, another high-fat Class II product, increased 3.3% through October, compared to 2019. “Climbing production of sour cream has also likely been the result of consumers eating more foods at home and craving high-fat, rich foods while nesting,” Berning says.

Yet despite the trend toward high-fat dairy products, butter supplies continue to be more than ample. Through October, butter production in 2020 climbed nearly 6% compared to the first 10 months of 2019. “Manufacturers have been churning out record-levels of butter to handle excess milk and cream,” Berning notes. For every month between January and October, the total volume of butter in cold storage has bested the same month a year earlier. 

“Strong retail holiday demand for high-fat Class I and II products, such as eggnog, ice cream, sour cream, and whipping cream, is helpful because it diverts cream away from churns, effectively preventing butter inventories from swelling further,” Berning says. While USDA recently raised its estimates for 2021 butterfat supplies and decreased its 2021 butter price forecast to be lower than 2020’s historically low prices, strong retail demand for full-fat products has kept prices from dropping more, she adds. 

 

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