The industry “is coming to recognize this as a crisis,” says Tom Gallagher, CEO of Dairy Management Inc., a farmer-funded trade group that promotes milk products. “We cannot simply assume that we will always have a market.”
Per-capita U.S. milk consumption, which peaked around World War II, has fallen almost 30% since 1975, even as sales of yogurt, cheese and other dairy products have risen, according to U.S. Department of Agriculture statistics. The reasons include the rise in popularity of bottled waters and the concern of some consumers that milk is high in calories.
Another factor, according to the USDA, is that children, who tend to be heavy milk drinkers, account for a smaller share of the U.S. population than they once did.
The decline’s recent acceleration is due in part to increases in milk’s retail price, a result of the soaring costs for grains fed to dairy cows, according to industry officials. But the depth of this year’s slide has surprised some food-industry executives because retail milk prices have risen only slightly this year after surging 9.2% last year, according to federal data.
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Americans drank an average of 20.2 gallons of milk last year, a decline of 3.3% from the previous year and the biggest year-over-year slide since at least 1975, according to the USDA. This isn’t to make light of the so-called fiscal cliff that awaits U.S. taxpayers if the Republican-led Congress doesn’t come to an agreement with President Obama on the nation’s fiscal crisis. But another crisis — the “milk cliff” — is poised to cause significant distress to the millions of Americans who enjoy this staple of most healthy diets.
The problem exists because the U.S. House’s version of a new farm bill hasn’t made it to the floor, even though the U.S. Senate’s version passed in July. With Congress breaking for the holidays and overwhelmed with the fiscal cliff negotiations, hardly a word has been spoken about the fact that, on Jan. 1, farm bill-less federal government will revert to using a 1949 version of the farm bill.