As COVID Declines, what is Happening to Milk Sales?

The February 21 post to this blog reviewed fluid milk sales through 2020.  Data for the first quarter of 2021 is now available.  Eating habits changed starting in March 2020 and continued with more in home dining as the U.S. instituted "stay at home" edicts to reduce the spread of COVID.  As the U.S. is now exiting from the many COVID restrictions, life is normalizing.  This post will cover the available data on milk sales that cover the first quarter of 2021.  The first quarter was only the beginning of a return to normal, but there are signs that fluid milk sales are beginning to return to normal levels and trends.  Unfortunately, that means that U.S. fluid milk consumption is decreasing.

The data in this post is based primarily on 12 month moving averages.  The 12 month moving averages eliminate monthly fluctuations, seasonal changes, and changes in the days per month.  All charts compare sales trends from the beginning of 2018.

In 2018 and 2019, fluid milk sales were declining by two percent annually.  In 2020, fluid milk sales did not decrease, giving hope to a fluid milk recovery.  The period beginning with March 2020 showed significant growth in fluid milk sales.  The increases were probably a combined impact of hoarding and more mornings with cereal and milk during the "stay at home" period.  The first quarter of 2021 shows a return to normalcy which includes a return to decreasing milk sales.  The first quarter of 2021 shows major drops averaging over five percent from the prior year.  This large percentage decline is partially the result of the high comparative March 2020 sales.  Chart I shows fluid milk sales in millions of pounds.  The current sales appear to be following the prior year trends of decreasing milk sales.

Chart I - Total U.S. Milk Sales

A recent post to this blog covered the "Amazing Success of Organic Milk."  Chart II shows the comparison of total milk sales to conventional milk sales and organic milk sales.   While the growth of organic milk at high prices is "amazing," it is still a very minor part of total fluid milk sales.

Chart II - Total, Conventional, and Organic Milk Sales

The pattern of total milk sales follows the conventional milk sales pattern as shown in Chart III.  Trend lines in Chart III show the continuing decline in conventional and total fluid milk sales.

Chart III - Total and Conventional Milk Sales

Chart IV compares the sales of whole milk, two percent milk, one percent milk and fat free milk in the first quarter of the year.  Whole milk and two percent fat milk are holding their own while other categories of milk continue to see declines.  

There are consistent declines in one percent milk, fat free milk and flavored fat free milk. One percent milk is declining at about five percent annually, fat free milk is declining at about 15 percent annually, and flavored reduced fat is declining at 19 percent.  The declines in these three categories make up most of the total year to year declines. 

Chart IV - First Quarter Milk Sales for 2018, 2019, 2020 and 2021

As the impact of COVID continues to dissipate, the impact on milk sales will likely also return to the trends of prior year.  Chart V and VI show graphically the sales of whole milk and two percent milk since the beginning of 2018.  These two categories make up 70 percent of total milk sales.  Chart V displays whole milk sales and clearly shows the peak in sales in 2020 and the rapid decline to a more normal level in the first quarter of 2021. 

Chart V - Whole Milk Sales

Chart VI displays two percent milk sales.  As whole milk sales were increasing in 2018 and 2019 (Chart V), two percent sales were falling.  In 2020, two percent fat milk saw a resurgence, but in the first quarter of 2021 two percent milk sales are declining.  Will two percent milk return to lower levels as the U.S. returns to a post COVID environment?  As data is available for the second quarter, it will be covered in a future post.

Chart VI - Two Percent Milk Sales

Sales of one percent milk and fat free milk continue their tumble.  One percent milk got a slight bump in mid 2020, but that quickly disappeared (Chart VII).  

Chart VII - One Percent Milk Sales

Fat free milk continued its fall in a very linear decline (Chart VIII).  Over the course of Chart VIII, fat free milk sales have dropped by 30 percent. With minimal sales, fat free milk may start losing shelf space in the expensive refrigerated sections of grocery stores.  There is no reason to expect any changes in the consistent decline of one percent fat and fat free milk.

Chart VIII - Fat Free Milk Sales

Flavored reduced fat milk is primarily a school item.  With many schools closed for COVID in 2020, sales dropped.  As schools reopen, there should be some rebound, however prior sales declines of five percent annually will likely continue after the brief rebound.

Chart IX - Flavored Reduced Fat Milk Sales

WHAT DOES IT ALL MEAN?

With a very successful vaccination program, COVID mandates are now being dropped.  The second quarter of 2021 data should show the impact of a return to normal.  A total return to normal will probably not occur until the third quarter.  As data is available for the upcoming 2021 periods, they will be reviewed in future posts to this blog.