Demand for producer milk is primarily dependent on the consumption of cheese, fluid milk, and butter. A prior post covered the production of producer milk. It is not increasing. The last post covered the increases in butterfat and protein components. They are increasing.
The charts below use 12-month moving averages to reduce monthly volatility. Cheese and butter charts are based on domestic disappearance from wholesale inventories. Fluid milk uses retail sales.
CHEESE
Milk for cheese uses 54% of producer milk. Total cheese domestic disappearance slowed in 2024 (Chart I). It is presently increasing at just .2% annually. In 2023, it was increasing at 1% annually. In 2022, it grew by 2% annually. The 2024 increase in domestic disappearance is just three million pounds in per month.
The category of “Other” cheese increased by 2% in 2024 (Chart II). This was an increase of 12 million pounds per month.
However, “American” cheese decreased by 2% in 2024 (Chart III). This was a decrease of 9 million pounds per month.
The category of “Other” cheese is larger than the category of “American” cheese, so the total increase is slightly positive.
The data in Charts II and III above are based on domestic disappearance. Are cheese net exports (exports minus Imports) increasing? The increase in Chart IV is based on net exports. In 2024, cheese net exports grew by 20%, a total of 15 million pounds per month.
The conclusion for cheese is that domestic demand has stopped increasing but net exports are growing, keeping some increase in total cheese demand for milk.
FLUID MILK
In an earlier post it was noted that domestic purchases of fluid milk are increasing after decades of decreasing. Chart V plots the sales of fluid milk. The increase is continuing! In 2024, fluid milk sales grew by .4% which is 13 million pounds per month.
What contributed to this increase?
“Other” milk is primarily lactose free milk. In 2024 it grew by 47 million pounds per month, which is 35%! The leader in the category is “fairlife “brand milk which is growing significantly.
“Whole” milk started increasing in 2022 and the increase has accelerated since then. In 2024, whole milk increased volume by 36 million pounds per month, which is 2.5% annually.
The growth in “Whole” and “Other” milk total 83 million pounds. Unfortunately, the reduced fat milk categories have decreased by 73 million pounds.
Organic Milk (Chart VI) is also seeing significant growth in 2024 of 17 million pounds, which is 7%. This is a continuing growth trend since 2022. Organic milk products are included in the “Total,” “Whole,” and “Other” milk Charts above.
BUTTER
Butter demand continues to increase nicely. The growth in 2024 is 15 million pounds per month, or 8%. Very little butter is exported due to tight supplies. The increases are domestic use of butter.
SUMMARY
The three major categories covered above are growing, but cheese and fluid milk are increasing slowly. Together, the three categories reviewed above would account for less than a 1% growth in demand for producer milk. The growth in components would cover this increase in demand and milk volume increases are not necessary. With the increase in milk per cow, fewer cows are necessary.
The largest change in 2024 is the slowing of domestic cheese demand. The MilkPay.com website will continue to follow these trends.
