October set a record in terms of butterfat prices with a high price of $3.7144 per pound. While this was welcome news for dairy producers, it is also felt by consumers, who have shifted away from margarine.
According to Statista, the per capita consumption of butter in the United States has increased by almost 45% since 2000. As of 2021, butter consumption amounted to approximately 6.5 pounds per person, two pounds more than in 2000.
CoBank shared that from 2011-2022, milk pounds shipped from U.S. farms grew 15%. However, butterfat pounds shipped from those same farms grew 27%.
Motivation Boost
What is motivating the increased levels of components on U.S. dairies? Jim Salfer, dairy extension educator at the University of Minnesota, says that based on all the information he has seen from the USDA, along with discussions from milk plants and working with farmers, he agrees that components are indeed increasing.
“Although maybe at a decreasing rate,” he says. “It might be down a little this summer because of the heat.”
Salfer says the answer to the incentive to increase component levels at the farm level is multifaceted.
- Base programs - they are almost all based on lbs. of milk. Therefore, there is an incentive for farmers and nutritionists to increase component levels if they can’t increase milk per cow or the number of cows.
- Hauling costs - they have gone up dramatically. Similar to above - this is an incentive to increase components.
- Nutrition - over the past decade or so we have understood the nutrition factors that affect components. Many nutritionists have implemented these additives. This topic comes up in a lot of team meetings that I attend.
Changing Consumer
Michael Dykes, president of the International Dairy Foods Association (IDFA), says how consumers consume dairy is different than a generation ago. The USDA says the U.S. per capita fluid milk consumption has been trending downward for decades.
“Americans eat more dairy than we drink, and we include dairy in all meals and occasions as well as for fitness and recovery, to live a healthy life, and to celebrate those special moments. With a greater focus on producing sustainable foods, dairy will continue to grow as a category well into the future.”
Salfer concludes that while in fact, consumers are eating more and more dairy products, there is no longer an incentive to make more water.
This is an incentive that Erick Metzger, general manager of National All-Jerseys concurs with, saying that virtually all the quota and base excess plans are based on milk volume.
“If producers can only market XX volume per month, they are going to pack all the components they can into their allowable volume,” he says.
