Dairy Report: Low Production, Low Prices & More Dairy at McDonald’s

November 14, 2018 01:00 PM
 
 

Lower cow and production numbers could be the trend for the dairy industry in 2019, according to a report from the United States Department of Agriculture (USDA). This might not be enough to help milk prices recover, however.

The USDA is also estimating lower cheese and butter prices heading into 2019, which could pressure prices to move upwards to $16.70-$17.60 per cwt., slightly higher than what producers are seeing in 2018.

“It’s always hard to tell if this is the new normal, but I think that we are in for a longer period of prices at this range,” says Ben Laine, senior economist at CoBank. “I’m not going to say that it’s never going to get better or that it will never pull back out of this range, but for now I think we need to start to adjust to this as the new reality that we need to deal with.”

Consumers eating more dairy at McDonald’s could have a positive impact on prices as we enter the new year. The fast food giant, now in the middle of a three-year transformation, is currently adding more dairy ingredients to their food items than ever before.

“Dairy is a critical compent across the menu,” says Linda Vangosen, the vice president of brand and menu strategy at McDonald’s. “It’s in 80% of our menu items, so truly it can be the star of so many of the menu items to our customers.”

Serving 25 million customers a day, McDonald’s is a huge player in the dairy industry and could feed every American once every 11 days.

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