By Bob Yonkers, Ph.D., IDFA Chief Economist

Annual estimated total fluid milk sales in 2010 declined by 1.40 percent from 2009, according to recently released data from the U.S. Department of Agriculture's Agricultural Marketing Service (AMS). This is the worst annual decline since AMS began publishing the monthly data series in 2000. Previously, the largest annual decline in fluid milk sales reported by AMS was a 1.01 percent decline in 2004 (after adjusting for the extra leap day that year).

Figure 1 shows that estimated total U.S. fluid milk product sales by AMS were lower than year-earlier levels in every month except November in 2010. In fact, between December 2009 and October 2010, monthly fluid milk product sales were lower than the same month the prior year for 10 straight months. Previously, the longest stretch of consecutive declines was only five months, which occurred twice during 2007-08.

Overall, AMS reported total sales of conventional fluid milk products declined by 1.8 percent in 2010. Among those fluid milk products with increased sales in 2010 were low-fat white milk (up 2.3 percent) and flavored fat-reduced milk (up 1.1 percent). However, most types of conventional fluid milk products experienced a decline in sales in 2010. Whole white milk fell 5.4 percent, reduced-fat white milk was down 0.6 percent, fat-free white milk declined 1.4 percent, flavored whole milk sales fell 4.1 percent and fluid buttermilk sales were down 18.7 percent.

USDA's Economic Research Service (ERS) has been publishing annual fluid milk product sales for decades using a slightly different methodology than that used by AMS. While the ERS data for 2010 will not be published until later this summer, a look back shows that the largest year-to-year decline since 1975 occurred in 1982 when sales fell 1.73 percent. The only other time that fluid sales fell more than one percent was in 1993 (down 1.18 percent).

Figure 2 shows the ERS annual fluid sales data by product category since 1975. Note the red line near the top, which shows the level of the record fluid milk products sales, which occurred in 1991. While the U.S. population increased by 22.16 percent between July 1, 1991, and July 1, 2010, (according to the U.S. Census Bureau), total fluid milk sales have remained relatively constant between 54 and 55 billion pounds during that time.