By Fran Howard
News on the dairy fat demand side couldn’t get much better—it appears U.S. consumers are hungry for butter and whole milk. After years of negative news reports about the hazards of eating too much saturated fat, butter and whole milk are once again gaining favor with U.S. consumers.
“Because dairy contains saturated fat, experts have long recommended choosing low-fat or nonfat versions. However, most studies show no link between heart disease risk and dairy products, regardless of fat levels,” states the September 2015 issue of the Harvard Heart Letter.
Last week McDonald’s announced that beginning October 6, it will serve some breakfast items all day in its 14,300 U.S. locations, and that its Egg McMuffins, bagels, and biscuits will be toasted in butter.
Preliminary estimates indicate that McDonald’s and its suppliers could use between 22.5 and 27 million pounds of butter in the fast-food chain’s restaurants in the first year alone.
“Cooking shows promote butter as a delicious, natural alternative to highly processed oils,” says Sarina Sharp, agricultural economist with the Daily Dairy Report. “Some medical journals are now touting the health benefits of milkfat, and some studies have even linked consumption of milkfat with lower rates of heart disease and obesity.”
Butterfat is also being consumed in whole milk. In June, Americans bought 1.122 billion pounds of whole milk, up 74 million pounds or 7.1 percent from June 2015. The increase was the largest year-over-year monthly increase in sales of whole milk in more than a decade, notes Sharp.
“The climb in whole milk sales was enough to increase sales of all varieties of beverage milk, which have been floundering for years,” Sharp says. June sales of all fluid milk rose 1.4 percent, or 53 million pounds, above year-ago levels. “June’s rise in fluid milk sales is the largest year-over-year increase since February 2013,” she adds.
June’s good news for fluid milk is not a one-time event, either. “Sales of whole milk in the United States have grown on a year-over-year basis in each of the last seven months,” says Sharp. “Manufacturers have stepped up whole milk bottling, leaving less cream for other users.”
According to USDA, cream supplies have been tight and even unattainable at times this summer. Whole milk is standardized to 3.25% butterfat. The 74-million-pound increase in sales of whole milk combined with the 6-million-pound increase in sales of flavored whole milk resulted in the consumption of an additional 2.6 million pounds of butterfat relative to a year ago, according to Daily Dairy Report estimates.
At the same time, though, sales of low-fat and skim milk products sank 46 million pounds in June, resulting in a decline of 938,000 pounds of butterfat demand.
“In total, though, consumers drank 1.7 million pounds more butterfat in June than they did a year ago,” she says. “Whole milk sales represent a rare bright spot in the still anemic fluid milk market. If sales of whole milk continue to climb, cream could remain tight, and manufacturers of cream-based products could continue to pay up for milkfat.”
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