Milk Sales In The U.S. Declined By $1.1 Billion In 2018 Because Of Increased Consumption Of Plant Based Alternatives

Dairy Farmers of America has indicated that statistics revealed that there was a $1.1 billion drop in dairy milk sales in 2018. The net sales for dairy milk last year were approximately $13.6 billion which was a drop from the $14.7 billion recorded in 2017. The DFA has over 14,000 dairy farmers across the U.S., and the decline in sales was announced on March 20 during the DFA 2019 annual meeting.

Low milk prices in 2018

The DFA president Rick Smith indicated that 2018 was a difficult year for dairy farmers in America because of low milk prices where the price averages $16.20 per hundredweight relative to 2017 when it averaged $17.65. Smith said that besides offering farm services to farmers and marketing their milk, the cooperative is making strategic investments to expand its global presences and strengthen its commercial portfolio as they look to provide sustainable services to members.  

However, in addition to the low milk prices, the industry blames the shift to plant-based milk alternatives such as oat, soy, and nut that are growing in popularity in the American market. The toll on dairy farmers has been huge such that dairy lobbyists have invigorated the debate on the ban of using marketable terminologies such as “cheese” and “milk” with qualifiers like “dairy free” for the plant-based alternatives to thwart competition. Senators from the dairy producing states have revived the 2016 “Dairy Pride Act” that aims at banning the use of the qualifier “Dairy Free.”

Bill spells unfavorable competition

However, the executive director of Plant-Based Food Association is opposed to the ides indicating that the proposed legislation is misleading, unconstitutional and one in bad faith. He said that in an era where there is so much innovation in the food sector such legislation would send a worrying message to emerging small businesses. He added that will synonymous to rigging the market against small businesses in favor of powerful and large business.

Simon said that introducing such legislation would hinder the growth of plant-based food start-ups that are rapidly growing in the production of new and great tasting plant alternatives for consumers. These are protectionist policies pushed by lobbyists and dairy state politicians to gain mileage which in fact will kill the free market.

The growing market for plant-based alternatives

According to a 2017 United States Agriculture Department report, there has been a 22% decline in milk consumption from 2000 to 2016. In the same period, the consumption of plant-based dairy alternatives has grown to around $17.3 billion with the trend expected to continue, and projections indicate that by 2023 the industry will be worth $29.6 billion. Returns on rice, almond, and soy milk are estimated to be around 6% more than those from dairy milk products.

The growing industry of plant-based alternatives is inspired by various food startups that are taking advantage of the increasing desire for healthier and sustainable products from consumers.