Market Watch Diary: Drink Milk, in any Language

November 26, 2013 04:16 AM
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Fewer and fewer people are saying "Drink milk" in the U.S.; however, billions of people abroad are saying "Drink milk" in their native tongues:


Over the next 10 years, worldwide consumption of fresh dairy products (primarily milk and yogurt) is forecast to increase at a compound annual growth rate (CAGR) of 1.13%, according to new estimates from the Organization of Economic Cooperation and Development (OECD).

The story is different region by region and country by country. The growth rate dips in the U.S. and surges more than 2% in China.

Between 2012 and 2022, per capita consumption of fresh dairy is expected to decline at an annual rate of 0.66%. In all so-called developed countries (including the U.S., Canada, Europe, some of South America and Oceania), the CAGR is pegged at 0.40%.

Good news springs forth from the rest of the world. In the so-called developing countries, the OECD projections translate to a CAGR of 1.51%, and in China, one of the developing countries, it’s a whopping 2.39%.

The table above reports this growth (or lack thereof) in kilograms per capita. A kilogram is equal to about 2.2 lb., so per capita consumption in the U.S. totaled about 81.1 kg. or 179 lb. during 2012. The OECD projects our per capita usage will slip to 76 kg. or about 167 lb. in 2022.

To compare and contrast the change, here’s the Chinese version of the trend line: 25.5 kg. last year and 32.3 kg. or 71 lb. in 2022.

Research by the U.S. Dairy Export Council (USDEC) threw another log on the fire. Chinese consumption of imported ultra-high temperature (UHT) processed milk jumped from nearly 18 million pounds in 2010 to a forecast 331 million pounds this year. UHT milk refers to milk heat-treated and packaged to provide a nine- to 12-month shelf life without refrigeration.

Sales totaled $76 million during 2012 and more than $85 million during the first six months of this year. An analysis of demand scenarios by USDEC indicated that annual demand would grow to 1.3 billion pounds by 2020.

In the bigger picture—OECD’s "developing" countries—we can find confirmation of the USDEC projections. OECD says consumption of fresh dairy in developing countries will grow from 337 million metric tons in 2012 to more than 440 million metric tons in 2022.

So by 2022, developing countries will need an additional 227 billion pounds of fresh milk and yogurt than last year. Last year, the U.S. produced about 200 billion pounds of milk total, for all dairy product uses.

As the chart shows, in 2012 there was modest pullback in consumption. The future won’t be a straight line higher, but the end point will be much higher than today.

"Drink milk" in almost any language means improved U.S. milk sales.

Jerry Dryer is the editor of Dairy & Food Market Analyst, You can contact him at

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