Demand is up, and so are prices

The USDA estimates that milk production will be up slightly to 183 billion pounds in 2007, but that is less than a 1 percent increase over 2006. Tighter supplies, coupled with strong demand and rising feed prices, are going to push up wholesale prices for most dairy products this year.

Over the past couple of years, the top dairy-producing states (Wisconsin, California, New York, Idaho and Pennsylvania) have been getting more milk from fewer cows. However, the gradual slowing in the rate of herd expansion since 2005 is going to affect stocks this year. Jerry Dryer, president of Dairy & Food Market Analyst in Delray, Florida, blames high energy costs and last summer's unruly weather conditions for potential price increases. "Alfalfa hay is in short supply as a result, and that's mainly what the cows eat," he says.

Roger Hoskin, an agricultural economist with the USDA who specializes in the dairy industry, cites the impact of demand factors as well. "Fluid milk consumption was on a steady decline but recently, it has started going up," he says. "And cheese, the largest single component for milk use, has seen a relentless climb. The country is on a cheese-eating binge."

Trade issues are going to confuse economic predictions for the next few years, Hoskin adds. Exports are driving the industry more than ever before, and imports of authentic European cheeses and niche dairy products are in demand by certain foodservice customers. However, imported cheeses account for only 5 percent of the market, a figure that hasn't changed in ten years, notes Dryer. "Plus, the EU is not subsidizing cheese exports and the dollar is weak against the Euro, so the United States is where the cheese action is," he adds.

That's especially true in the specialty cheese arena, which is expanding at a faster rate. Nevertheless, the price of milk has less of an impact on this sector. "Specialty cheeses are much more value-added and already on the expensive side. They don't have the same flexibility to go up and down with the price of milk," Dryer explains.

More From FoodService Director

Industry News & Opinion

Sodexo has appointed Cathy Desquesses as its chief people officer, the company announced on Friday.

Before joining Sodexo, Desquesses held multiple leadership roles in the human resources department at General Electric, where she worked for 20 years. Most recently, she was the global HR leader for GE Power Gas.

Desquesses will begin her new role on July 1 and will report to Sodexo CEO Denis Machuel. She will replace Juan Pablo Urruticoechea, who is moving into a new position at Sodexo.

Photo courtesy of Sodexo

Managing Your Business
woman in the kitchen alone

The #MeToo movement has turned sexual harassment into the top labor-related regulatory issue for all employers, triggering action from three out of four companies, according to a new survey on workforce concerns.

About two-thirds (66%) of employers rank the issue among their top two employment-related legal worries, even without a change in the pertinent laws and regulations, the canvass found.

What has changed, concluded surveyor Littler Mendelson, one of the nation’s largest labor-focused legal firms, are employee expectations and the social climate.

“No company...

Managing Your Business
Starbucks college campus

Noncommercial dining centers are often filled with their own Starbucks, Burger Kings, Panera Breads and dozens of other nationally recognized brands. Branded concepts, whether corporate brands or self-operated, offer diners familiar names, menu items, and a sense of place. This translates into more money spent and more diner loyalty for foodservice operators.

However, the success of branded concepts vary greatly. There can be significantly different results depending on whether noncommercial operators decide to franchise, lease or develop their own branded concepts. There’s no one-...

Menu Development
pizza oven

Wood-fired ovens take the biggest slice of the pie when it comes to pizza-cooking preference for consumers. Just fewer than half (45%) of consumers say they prefer a pizza cooked in a wood-fired oven compared to other oven cooking methods. Here are the styles of ovens pizza consumers prefer most.

Wood-fired oven 45% Gas oven 13% Electric oven 11% Grilled 4% Coal oven 4% No preference 23%

Source: Technomic 2018 Pizza Consumer Trend Report , powered by Ignite

Photo courtesy of Thinkstock

FSD Resources

Code for Asynchronous jQuery Munchkin Tracking Code