Fluid Milk Profile
The United States is the single largest producer of cow's milk in the world. In 2016, the country supplied 212 billion pounds of milk, a 4 billion pound increase from the previous year. California continues to lead the country in milk production, followed by Wisconsin. New York, Idaho and Pennsylvania round out the top five milk-producing states.
Per person fluid milk consumption has declined slowly due to competition from other beverages and because of a smaller percentage of children in the United States. According to the Economic Research Service (ERS), the per person consumption of fluid milk in 2016 was 154 pounds.
Overall, USDA's Ag Marketing Service reported total sales of conventional fluid milk products were 53,739 million pounds in 2011, a decline of 1.8 percent from 2010. Milk is regarded as a flow commodity because it is produced every day and must go to market at least every other day. Day-to-day milk supply does not coincide with milk demand. Demand for milk for bottling is nearly zero on Sundays and limited on Saturdays and Wednesdays since most plants close those days due to buyer demand schedules.
According to an ERS study on the milk pricing system, establishing a balance between milk’s supply and demand would require a balance among the following factors:
- Producer prices remain high enough to maintain production yet not encourage surplus milk production.
- Consumers willing and able to pay for milk and dairy products.
- Producers, handlers and the public interested in the orderly flow of milk and dairy products from producers to consumers.
In recent years, producer checkoff-funded Dairy Management Inc. has focused efforts on increasing milk consumption among youth. Milk in resealable plastic containers is available at more than 35,000 Wendy’s, McDonald’s, Burger King and Sonic Drive-In restaurants nationwide. Milk in resealable containers is also being promoted in school cafeterias and through vending machines. More than 6,000 schools now offer single-serve milk in plastic resealable bottles.
The number of licensed dairy herds in the United States totaled 41,809 in 2016, down significantly from only 5 years ago in 2011. (NASS)
The average number of milk cows on U.S. farms was 9.3 million head. Production per cow averaged 22,774 pounds, 378 pounds above the previous year. (NASS)
In its long-term projections, the USDA forecasts that the number of dairy cows will gradually decline to 8.9 million by 2018. USDA also forecasts that milk production will slowly rise to 227 billion pounds and prices will settle to $21.75 per hundredweight (cwt) in the same period.
The United States has approximately 330 commercial fluid milk bottling plants and nearly 1,600 dairy product manufacturing plants. Due to the perishable nature of milk, it must be marketed promptly as fluid milk or processed into a storable manufactured dairy product.
More than 80 plants in the United States manufacture milk powder, accounting for 10 percent of the world’s milk powder production, or more than 700,000 MT. The U.S. dairy industry is positioned as a primary worldwide dairy ingredient supplier.
Fluid milk competes with other beverages for sales. While skim milk consumption has increased over time and whole milk consumption has decreased, overall milk intake by Americans has dropped in the last 20 years.
Other factors related to milk competition include the fact milk is viewed as a commodity. There are few branded milk products sold. Most milk is private label. Milk competes against worldwide beverage makers with well-known brands.
Milk distribution is another factor. Milk is mainly sold in take home retail outlets, primarily supermarkets. Compared to other competing beverages, its promotion is limited due to product perishability.
National Agricultural Statistics Summary (NASS) 2017.
Dairy Consumption, USDA, 2017.
Dairy Products Annual Summary, National Agricultural Statistics Service (NASS), USDA, 2010.
Global Ag Trade System, FAS, USDA.
International Dairy Foods Association.
Milk Production, NASS, USDA, 2011.
Milk Production, Disposition, and Income Annual Summary, NASS, USDA, 2010.
National Milk Producers Federation.