Dairy Report: Dairy Demand At 56-Year High, Farm Wages Trending Higher

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According to the USDA, the domestic demand for dairy has reached a 56-year high. At the same time, farm labor wages are also trending upwards. AgDay’s Betsy Jibben explains more in this week’s Dairy Report.

Domestic Dairy Demand at 56-Year High

It might be hard to see it in milk checks or on the news, but domestic demand for dairy products is at a 56-year high.

You have to go back all the way to when John F. Kennedy was president, in 1962, to see higher per capita demand for dairy products, according to United States Department of Agriculture data. Per capita dairy sales last year totaled 646 lb.

No matter what critics say, attempts to craft a “death of dairy” narrative are mistaken, says Alan Bjerga, senior vice president of communications for the National Milk Producers Federation.

Though fluid milk sales have fallen dramatically over the past decade, some 3.7 billion pounds between 2013 and 2017, other dairy product sales have more than made up for these losses. (Note: July fluid milk sales were actually up a tick, 0.2%, mostly on the strength of conventional whole milk and organic milk sales.)

USDA data shows per capita cheese sales have tripled since 1971, and per capita butter usage is at its highest since 1968. (Plant-based margarine sales have tanked, with 2010 sales in that category reaching the same level as 1942, when dairy butter was in short supply due to World War II. Margarine sales were so low by 2010 USDA stopped tracking it.)

Milk, like every other beverage, exists in a competitive marketplace, says Bjerga. But spinning a segmenting beverage market into a “declining dairy” narrative is disingenuous at best, he says.

Dairy farmers surely welcome this news, though some are still left to wonder why milk prices have been so low over the past five years. The primary reasons, say economists, are that world markets have been soft and dairy exports have lagged due to global market disruptions, trade disputes and tariffs.

Farm Wages Up More Than Those In The City

Farmers know that to compete for and keep workers, they are continually under pressure to offer raises to employees. Now, United States Department of Agriculture data confirms it. 

The data, over the last five years, also shows that farm wages are growing faster than non-farm compensation.

Between 2014 and 2018, the average hourly real wage (inflation adjusted to 2018 dollars) for nonsupervisory hired farm workers rose from $12/hour to $13.25, an increase of 10.4%, USDA data shows.

Nonfarm wages are still notably higher, growing from $21.90 in 2014 to $22.97 in 2018, a 3.5% increase.

USDA economists note that the rate of growth in farm wages from 2014 to 2018 is the fastest it has been during the past two decades. USDA does not go into the reason for this surge in wages.

But anecdotal reports from farmers themselves point to a shortage of immigrant workers, competition from off-farm jobs and a reluctance if not outright refusal by native-born workers to work on farms.

For more Dairy Report Coverage, read:


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