Newspaper article Charleston Gazette Mail

Pizza Rescuing Dairy Prices as Americans Drink Less Milk

Newspaper article Charleston Gazette Mail

Pizza Rescuing Dairy Prices as Americans Drink Less Milk

Article excerpt

Americans love their cheese, but maybe not as much as dairy farmers do.

Even after people cut back on milk use for decades - a consequence of more drink options including juices, sodas and sports drinks - U.S. cows are producing more milk than ever. While the glut has eroded dairy income, the industry is getting a jolt from demand for high-fat byproducts that have given the world creations like the Grilled Cheese Stuffed Crust Pizza and led McDonald's to start using butter on its Egg McMuffins rather than margarine. The jump in total domestic cheese consumption over the past two years was the biggest since 2000, with Americans eating the most on average since the government began tracking the data in 1975. Butter demand also advanced, and more gains are expected this year. The sales surge is helping to boost slumping U.S. milk prices at a time when surpluses forced production cutbacks in most of the world's major exporters.

"We're just seeing a greater trend toward cheese consumption in people's everyday diets, said Matt Mattke, director of the Market360 Dairy advisory team at Stewart-Peterson Group in West Bend, Wisconsin. "With the beverage market, there's a lot more choices. But you can't replace cheese on a pizza.

Total domestic consumption of fluid milk has tumbled for six straight years and is forecast to drop again in 2017, the U.S. Department of Agriculture reported last month. Americans on average are drinking about 155 pounds each annually, down by one-third from 1980. At the same time, production touched a record for a seventh straight year and probably will surge this year, the government said.

Some of that gap is being made up by domestic cheese consumption, which reached a record 5.35 million metric tons in 2016, up 7.6 percent from two years earlier, the USDA said. Americans on average are eating 35 pounds each annually, or twice the amount in 1980. Butter use was at an all-time high of 870,000 tons last year and is forecast to jump 8 percent in 2017, the government said.

Sales at pizza chains have bucked a slump across the restaurant industry, as consumers embrace cheap, easy-to-get food. Pizza Hut, a unit of Yum! Brands, launched a Grilled Cheese Stuffed Crust Pizza in September, with cheddar and mozzarella baked into a butter- topped edge. A new pan pizza from Papa John's International - already laden with cheese baked on top - features more sprinkled to the edge of the crust.

Even among carbohydrate-avoiding consumers who eschew bread, unprocessed fats like butter are seeing renewed appeal because they are now viewed as more healthy, Credit Suisse Research Institute said in a 2015 report. Global demand for fats will rise 43 percent by 2030, fueled by increased shifts toward dairy, eggs and red meat. The National Restaurant Association forecasts "artisan cheeses among the top trends in 2017. …

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