5 trends hitting US dairy in 2021

The corona crisis forced many American dairy producers to reconsider the current way of trading, mainly the dependence on sales (of cheese and fresh milk) to various food service companies was discussed. The vulnerability of the US dairy sector's heavy dependence on external labor was also exposed as a result of the pandemic. What trends should Americans take into account in 2021?

Alternatives to milk
Soy milk, almond milk, oat milk and rice drinks. You can no longer miss them in most stores. It is a trend that will certainly continue in 2021. Although US analysts do not expect vegans and lactose-intolerant consumers to drive much change in milk prices, it cannot be ignored that the rise of the 'flexitarian' is a challenge for the US dairy sector. In dollars, the market for American plant-based 'milk' already grew by 2019% in 5. The question for many producers is whether these are switchers or whether consumers will continue to drink 'both ways'.

The good news is that the latest figures show that global dairy consumption increased in 2020, especially during the enforced lockdowns. For example, India reported a 50% to 100% increase in sales and British cheese consumption increased by 48% over the previous year. A second trend that American dairy farmers should take into account, according to various analysts, is that dairy products have been rediscovered.

China continues to play a major role
The United States Department of Agriculture (USDA) expects that China will import large quantities of dairy products in 2021. This is despite Chinese dairy production itself reportedly also increasing by 4,5%. Chinese imports of fluid milk, especially pre-packaged Ultra Heat Treated (UHT) from the European Union and New Zealand, are estimated at around 2021 million tonnes in 1. That is an increase of 5% compared to 2020. China is also expected to import more cheese from New Zealand and Australia, among others. The United States, the third largest cheese supplier, may also be able to increase exports to China.

Innovation is necessary to increase production. See trend number 4 there. In recent years, a flood of technological innovations have been introduced to the market to help American dairy farmers become more efficient, profitable and sustainable. Consider feeding robots, milking robots, cameras, sensors and data solutions. According to analysts, all these technologies can help address various challenges such as labor shortages, higher production costs and lack of operating capital.

The climate debate
Finally, the climate discussion will also affect the American dairy sector, although this is of course a global trend. However, many dairy farmers in the United States may have to deal with this more in the near future than elsewhere in the world. In the agricultural plan Climate is the number one priority for new President Joe Biden. For example, on his first day in office, the president ensured that the country rejoined the Paris climate agreement. 

The president also stated that he wants to make the American agricultural sector the first in the world to be emission-neutral. According to him, by giving farmers money to capture carbon in the soil, a new revenue model is created that should improve the economic position.