Despite a tightening of consumer pocketbooks, the dairy industry is finding reasons for optimism. According to dairy analyst Katie Burgess, a shift in dietary trends and robust international demand are helping the sector navigate a period of sluggish domestic food sales.
Burgess, of Ever.Ag, notes that while high inflation and the rising cost of dining out have led many consumers to pull back on spending, dairy remains a bright spot due to its nutritional profile. High-protein, natural products are currently in high demand.
“Even though I think you as consumers are struggling a bit right now, so we don’t see particularly strong food sales generally, dairy still has a good news story,” Burgess explains on the Mid-West Farm Report.
She points to cottage cheese as a primary example of this trend, noting that production surged nearly 20 percent in March.
The market is also closely watching the non-fat dry milk sector, which recently hit all-time highs following a medium-sized product recall on the West Coast. While prices have plateaued just a penny off those records, the industry is waiting to see if the market has reached its peak or if further supply constraints will push prices higher.
The diversification of sales outlets, particularly in the export market, has become a critical buffer for the industry as restaurant traffic slows. Burgess emphasizes that finding these alternative outlets is essential for maintaining stability.
“When people are eating out less, that means less dairy consumed. So that’s why it’s so good to be finding these other outlets for sales,” Burgess says.
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