With consumer opinions on full-fat dairy products shifting, a CoBank report projected the current butterfat “boom” will continue.
The report identified domestic demand as the biggest driver for butterfat, with consumers eating more dairy than they drink. It pointed to demand trends – which are expected to keep growing – for products such as butter, cheese, cream for upscale coffees, ice cream, and other frozen desserts.
The CoBank report explained that consumers began shifting away from margarine and reduced fat dairy foods in the past decade, as nutrition research emerged that cast a positive light on full-fat dairy.
Between 2011 and 2022, the report highlighted, United States butterfat production grew by 27%, while at the same time US milk production saw 15% growth.
With the dairy supply chain finding additional value from milk with higher fat and protein levels, per the report, US dairy farmers are economically incentivized to produce milk with more butterfat.
“Despite the significant growth in domestic butterfat production over the last decade, there is still tremendous upside potential, largely because the US remains a milk fat-deficit nation,” explained Corey Geiger, lead dairy economist for CoBank. “Butter imports into the US have skyrocketed over the last decade to meet the surging domestic demand for full-fat dairy products. Also, due to strong domestic demand, the US barely exports any of its butterfat. As a result, low-fat, skim-solids product exports far outpace full-butterfat products.”
On-farm feeding programs, as well as the use of genomic testing programs, in recent years contributed to improving butterfat production, CoBank pointed out.
The butterfat market, Geiger said, has tremendous growth potential, with more consumers eating dairy products – and favoring full-fat dairy foods.
“That means continued innovation in things like premium butter, butter spreads and further development in the butter board phenomenon will bring value to producers, processors and consumers alike,” he said.
The full report can be found online via the CoBank website.
