Fluid Milk Sales Trends for First Half of 2019

Previously, in the June 5, 2019 post to this blog, fluid milk sales trends were reviewed through the first quarter of 2019.  Data is now available to review milk sales in the second quarter of 2019.  Many of the same patterns seen in the earlier post linked above are continuing. 

1. Milk consumption is continuing to decrease.  The rate of decrease is slightly over 2 percent annually.
2. Sales of all reduced fat milks are declining.  The declines, which will be reviewed in detail below, range from 2 percent to over 10 percent per item compared with the prior year.
3. Whole milk is holding its own with a very slight increase in sales.
4. Organic milk sales are continuing to decrease at a faster rate than conventional milk.

Per capita consumption of milk has been falling for decades.  However, with significant population growth, total consumption was fairly constant.  In recent years population growth has slowed and per capita consumption has increasingly declined.

Chart I shows the decline in milk sales based on 12-month averages for 2018 and 2019 YTD.  Using a 12-month average eliminates seasonal and calendar variations.    As the chart shows, the decline in sales is very linear.  From the beginning of 2018 to June of 2019, the 12-month average has dropped from 4.1 billion pounds of milk to 3.9 billion pounds of milk, a 3 percent decline in 18 months.

Chart I - 12-Month Moving Average of Milk Sales

Chart II shows the percentage change in the 12-month rolling average sales numbers in 2018 and 2019 through June.  The monthly decreases range from 1.6 percent to 2.3 percent and average 2.1 percent.

Chart II - Percent change from Prior Year in 12-Month Averages

Getting into the detail, Charts III and IV show the decline by type of milk for the first and second quarters of 2019.  The biggest change is in sales of "fat free" milk.  The "fat free" sales decline in the second quarter was over 10 percent vs. the prior year.  "Fat free" milk is an easy target for alternate plant-based products which are typically "fat free."  In total, the fat reduced products were down 4.7 percent in the first half of 2019.

Chart III - Change vs. the Prior Year by Milk Type for the First Quarter of 2019

Chart IV - Change vs. the Prior Year by Milk Type for the Second Quarter of 2019

Another noted change is the accelerating decline in "organic" milk.  During the first half of 2019, "organic" milk was down 4.6 percent from the prior year.  Organic milk is a target for alternate plant-based products as they appeal to the same audience.

Chart V - Conventional vs. Organic Milk Sales

The final graph of interest shows the monthly decline in milk sales vs. the prior year for the last three years.  Versus the prior year, there have been monthly declines ranging from zero to negative six percent.  The trend line shows an annual decline of a little over two percent.

Chart VI - Percent Change in Sales for 2017 through 2019 YTD

SUMMARY

In total, milk sales continue to decline while milk production increases.  Analytically, the decline in milk sales is just above 2 percent annually.  Cheese, on the other hand, is a major growth area and will be reviewed for the first half of 2019 in an upcoming post to this blog.  Other major uses of milk include exports, which are not growing, and butter, where the consumption growth is largely taken by imports of Irish butter.   Excess milk is still a problem which must be resolved.