Dairy Market Update: Fluid Milk Sales Surprisingly Strong

Sales of fluid milk products in the first six months of 2006 were surprisingly strong, gaining 1.4% when compared to the same period last year, but the increase was not uniform across all types of products. Sales of whole milk from January to June 2006 were down by 2%, and sales of all flavored milks declined by 0.3%. All other products experienced increased sales when compared to the same period last year, with reduced-fat milk rising by 3.2%, and both lowfat and nonfat milk product sales increasing by 2.7%.

The overall gain represents the largest increase in sales for the first six months in any year since the Agricultural Marketing Service (AMS) of the U.S. Department of Agriculture (USDA) began estimating total monthly U.S. fluid milk sales in 2000. Previously, the largest sales increase during the first six months was 0.8% in 2000. For three of the past six years, U.S. fluid milk sales were down in the first six months.

Total U.S. fluid milk sales for all of 2005 were lower than they were in 2000 by nearly 800 million pounds (92.8 million gallons), after adjusting for the extra leap day that year. Total U.S. fluid milk sales for 2006 will have to maintain the current momentum, increasing nearly 1.5%, to match the total sales figures posted in 2000.

In January, AMS began reporting estimates of total U.S. organic milk sales. During the first six months of 2006, 118 million pounds (about 13.7 million gallons) of organic whole milk was sold, along with 388 million pounds (about 45 million gallons) of fat-reduced organic milk.

Total U.S. fluid milk sales for the first half of the year reached 27.3 billion pounds (3.2 billion gallons), and organic fluid milk sales accounted for 1.85% of total sales.

Posted August 28, 2006