COVID-led consumer changes hanging around
A recent report by CoBank says consumer behavior changes caused by the coronavirus pandemic could last for at least an additional 12 to 18 months.
“Consumer dollars available to spend on food are going to be down and so that is going to be impacting sales and how consumers are going to be consuming their dairy products.”
Knowledge Exchange Division Manager Tanner Emhke tells Brownfield the dairy supply chain has taken a major hit as consumers shifted buying patterns from food service to retail.
CoBankCDairy2 “When we see consumers struggling with jobless rates that we’ve seen during the recession and the shutdown—they’re wanting to protect their income.”
He says with that shift, processors had to retool facilities, and the meantime, a record amount of raw milk was dumped during April.
With consumers at home, fluid milk sales were up 10 percent from March through May and commodity cheese was up 20 percent. While there is a lot of butter in the U.S., it wasn’t in the right form at retail and Emhke says that led to a huge surge in imported butter sales.
“For instance, a lot of these Irish brands coming into the United States, they were already there with a product ready to go on grocery store shelves whereas processors here in the U.S. had to do a shift over. It didn’t go so easily.”
Thankfully, he says dairy processing is very automated and has a relatively low risk for a COVID-19 outbreak compared to other food processors, but other areas of the supply chain including transportation remain a concern.
Emhke says he expects a lot of the consumer behavior habits of the pandemic to stick including more meals consumed at home and processors will need to adapt to get products to people.