WELCH, Minn. – The dairy market has been in a rough spot for the past few years because of increasing supply, shifting demand and tighter regulations.
    Phil Plourd, of Blimling and Associates, shared his projections and expectations for the global dairy market during a presentation Nov. 28 at the Minnesota Milk Dairy Conference and Expo  in Welch, Minn.
    The presentation began optimistically, with Plourd sharing the positive points of dairy’s current economic state.
    “Global demographics are still in favor of the U.S. dairy producer,” Plourd said. “The majority of global population is moving to urban areas and by 2050, 68 percent of the world population will live in urban areas.”
    Evolving tastes and generally wealthier consumers mean more people demanding dairy products.
    “We are well-positioned to serve the growing population,” Plourd said.
    Based on his research, the global population is still favorable with milk consumption, and the U.S. economy is on an upturn as well. Job openings are increasing, while unemployment is decreasing.
    “Right now, we have more jobs available than people to fill them,” Plourd said. “More people working means more money for them to spend on our products.”
    There is a strong global cheese demand, and Europe is vulnerable concerning milk production after an unseasonably dry summer and fall.
    “U.S. dairy farmers’ productivity is great,” he said. “It’s actually remarkable.”
    Production is up 131 percent on 9 percent fewer acres using 8 percent fewer cows. However, the consumption of dairy in the United States is not keeping up with production, creating excess product.
    “We need to be exporting more and more every day,” Plourd said. “We just don’t have that demand in America right now to keep up.”
    Projections for the dairy market put the United States about 1.5 percent above 2018 levels in 2019. While that may not seem like much, it is an improvement.
    “We know we’re at the bottom now,” Plourd said. “Which is encouraging, we know it can’t get worse. Now it’s just a matter of how long it is going to last.”
    In addition to an abundant supply and low demand, dairy marketers are facing more and more outside competition driven by ever-evolving consumer tastes.
    “There has been a major change in consumer attitudes and demographics,” Plourd said. “Fewer people are buying their food in stores, and fewer people are going out to eat, rather everything is being delivered to their door. Gone are the days of impulse buying.”
    With Amazon leading the trend by buying Whole Foods in 2017, and Walmart following with investing in more Internet sale possibilities, increasing companies are adapting to a convenience-driven consumer.
    “Think about curbside pick-ups, delivery companies and online shopping,” Plourd said. “These are all examples of an evolving consumer.”
    Another consideration is lab-grown beef and milk.
    “Watch the companies that are investing in these ideas,” Plourd said. “Tyson and Cargill invested in lab-grown meat. Archer Daniels Midland invested in Perfect Day (lab-made milk).”
    This is the competition facing the dairy industry today. Companies are making calculated decisions, and dairy farmers need to keep up, Plourd said.