Digest Highlights

Retail dairy sales: COVID-19 variant impact ahead?

Increased incidences of the COVID-19 delta variant during August threatened a return to normal food shopping patterns and retail dairy product sales. In July, however, consumers were making more trips to the grocery store and staying longer. As a result, retail dairy product sales moved closer to year-ago levels and were strong when compared to pre-pandemic 2019, according to a monthly update from the International Dairy Deli Bakery Association (IDDBA).

Natzke dave
Dave Natzke
Editor / Progressive Dairy

Information Resources Inc. (IRI) U.S. grocery store sales data shows dairy generated $34 billion during the first seven months of 2021, down just 4% compared with the same period in July 2020 but 11% more than January-July 2019, said Eric Richard, IDDBA industry relations coordinator.

In terms of dollars, July 2021’s year-over-year sales moved above 2020 levels for fluid milk, yogurt, creams and creamers, and cream cheese. By volume, sales were higher for yogurt, creams and creamers, and dairy desserts.

As other activities picked up outside the home and consumers looked for help in meal and party preparation, they were also buying more deli-prepared foods, although deli cheese did not enjoy the same strength as meats. Sales of grab-and-go and pre-sliced cheeses showed increased demand for convenience. Purchases of specialty cheese slowed down a little in July.

The August sales and survey results will be released in mid-September and should capture the impact of the delta variant on retail grocery and food service industry sales.

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As of early August, most school districts were also planning to resume in-person education, affecting where students will get a portion of their meals (food service versus retail). According to USDA’s Dairy Market News, school districts are ramping up seasonal orders, diverting milk from cheese vats into bottling and moving some loads to the Southeast to meet immediate Class I milk needs.

June 2021 fluid sales were lower

June 2021 fluid milk sales followed the long-term trend lower. Here’s an update from the USDA’s Agricultural Marketing Service:

  • Total sales: June 2021 sales of packaged fluid milk products totaled 3.39 billion pounds, down about 6.7% from the same month a year earlier. At 22.13 billion pounds, year-to-date (January-June 2021) sales of all fluid products were down 5.1%.

  • Conventional products: June sales totaled 3.16 billion pounds, down 6.9% from June 2020. Sales of flavored milks showed limited growth, with flavored whole milk up 1.9% and flavored fat-reduced (2% fat) milk up 5% from the same month a year earlier. Those two flavored milk categories made up about 9% of total conventional fluid product sales volume during January-June 2021. Year-to-date sales of conventional products were down 5.4% at 20.7 billion pounds.

  • Organic products: Monthly sales totaled 228 million pounds, down 3.7% from a year earlier. Whole milk sales increased 2%, while 2% flavored milk posted a sales gain of nearly 21% compared to June 2020. At 1.43 billion pounds, 2021 year-to-date sales of organic products were down about 1%. Organic represented almost 6.4% of total fluid product sales in January-June 2021.

The U.S. figures are based on consumption of fluid milk products in Federal Milk Marketing Order (FMMO) areas, which account for approximately 92% of total U.S. fluid milk sales, and adding the other 8% from outside FMMO-regulated areas. Sales outlets include food stores, convenience stores, warehouse stores/wholesale clubs, nonfood stores, schools, the food service industry and home delivery.

Global Dairy Trade index posts first gain since early April

It wasn’t much, but the index of Global Dairy Trade (GDT) dairy product prices increased 0.3% in the latest auction, held Aug. 17. It marked the first gain in the global market index since April 6. Prices in major product categories were mostly higher:

  • Skim milk powder was up 1.1% to $3,052 per metric ton (MT, or about 2,205 pounds).
  • Butter was up 4% to $4,771 per MT.
  • Whole milk powder was down 1.5% to $3,552 per MT.
  • Cheddar cheese was up 2.8% to $4,186 per MT.
  • Anhydrous milk fat was up 1.5% to $5,791 per MT.

The next GDT auction is Sept. 7.

Maryland & Virginia Milk Producers buying Hunter Farms plant

The Maryland & Virginia Milk Producers Cooperative is expanding its processing footprint in the Southeast by purchasing the Hunter Farms plant in High Point, North Carolina. Sale of the plant, which produces ice cream, milk, buttermilk and other dairy products, is expected to close Aug. 30, 2021. Terms were not announced.

The dairy processing plant is currently owned by Harris Teeter, a wholly owned subsidiary of The Kroger Co. It operates over 230 stores and fuel centers in seven states and the District of Columbia, marketing dairy products under the names of Hunter Farms, Highland Crest and Harris Teeter. Hunter Farms also supplies dairy products to major food service and quick-serve restaurant chains throughout the Southeast.

Maryland & Virginia Milk Producers Cooperative is owned by more than 900 dairy farm families in 13 states who produce about three billion pounds of milk per year. The cooperative also owns processing facilities in Newport News and Strassburg, Virginia, and Laurel and Landover, Maryland.

NMPF still waiting on the FDA

In yet another letter to the FDA, the head of the National Milk Producers Federation (NMPF), Jim Mulhern, urged enforcement standards on the proper labeling of imitation dairy foods and criticized the agency for inconsistency of its labeling interpretations.

In a yogurt standards regulation released in June, the FDA stressed the importance of dairy standards of identity. However, Mulhern said, the FDA continues “to turn a blind eye to the deliberate unlawful labeling practices perpetrated by plant-based food companies.”

USDA accepts bids for dairy products

The USDA awarded bids for delivery of dairy products for domestic feeding programs in the final quarter of 2021 to:

  • Darigold Inc. of Seattle, Washington, and Select Milk Producers of Dallas, Texas, for 71,820 pounds of print salted butter

  • Byrne Dairy Inc. of LaFayette, New York; Diversified Foods of Metairie, Louisiana; Gossner Foods of Logan, Utah; Industria Lechera De of Puerto Rico; JEC Consulting of Charlotte, North Carolina; and O-AT-KA Milk Products of Batavia, New York, for 13.37 million pounds of 1% ultra-high-temperature (UHT) milk and evaporated skim milk

Things you might have missed

  • In a partnership with the Social Security Administration, the U.S. Citizenship and Immigration Services (USCIS) is making it easier for applicants filing for lawful permanent resident status to also apply for a Social Security number (SSN) or replacement card. Previously, these individuals had to apply for a Social Security number at a Social Security office. USCIS is revising Form I-485, Application to Register Permanent Residence or Adjust Status, to include the additional questions needed to apply for an SSN or a replacement card.

  • The USDA is providing $67 million in competitive loans through the new Heirs’ Property Relending Program, which aims to help agricultural producers and landowners resolve heirs’ land ownership and succession issues. The program is administered through the Farm Service Agency (FSA). Intermediary lenders can apply for funds between Aug. 30-Oct. 29. Heirs may use the loans to resolve title issues by financing the purchase or consolidation of property interests and financing costs associated with a succession plan. Heirs may not use loans for any land improvement, development purpose, acquisition or repair of buildings, acquisition of personal property, payment of operating costs, payment of finders’ fees or similar costs.