U.S. Dairy Market Sales Continue to Increase Despite Concerns over Economy – PMMI Study

According to the International Dairy Foods Association, dairy continues to be the fourth-fastest growing grocery segment in the U.S. In fact, the dairy industry in this part of the world alone is a $50 billion per year business.

17/06/09 The latest study by trade association PMMI, Dairy Industry Market Research Study 2009, reveals that while the U.S. dairy industry has been grappling with consequences of the economic downturn over the last two years, sales of dairy products in U.S. alone saw an increase of 2 percent last year – despite an overall price hike of 9 percent.

According to the International Dairy Foods Association, dairy continues to be the fourth-fastest growing grocery segment in the U.S. In fact, the dairy industry in this part of the world alone is a $50 billion per year business, of which almost 68 percent is dominated by 15 mega dairies (800-plus dairy cows). However, the industry also faces challenges, such as uncertain availability for raw materials and price fluctuations, which are likely to intensify in the coming years.

PMMI’s new study, which discusses perspectives of 40 dairy processors, associations, and suppliers, aims to analyze the local dairy market dynamics and determine the outlook for the dairy industry in the future. Some of the key findings discussed in the report include:

• U.S. dairy industry anticipates production shift to West Coast, with industry consolidation creating a greater number of mega dairies
• 71 percent of dairy processors likely to make capital expenditures for packaging equipment in the next 12 months despite economic downturn; additional 16 percent to make packaging line modifications that might require machinery investments
• Stronger dairy/vendor relationships expected: 90 percent of survey respondents rely upon machinery builder to train operators; 73 percent want suppliers to play more consultative role from concept stage to installation
• Primary and secondary packaging change drivers include considerations about the most economical and environmentally friendly materials, customer requirements and improving efficiency to address lower margins
• Energy consumption seen by dairy processors as top method to achieve greater sustainability
• Consumer demand for healthy, convenient and portable food driving new packaging formats, industry segment growth