When consumers spend $1 on dairy products, dairy farmers receive 36 cents of that dollar. That’s according to the latest research by USDA’s Economic Research Service. Overall, that share has held in a rather tight window of 28 to 32 cents from 2015 to 2021. The number did climb to as high as 38 cents from every $1 in 2014 when farm gate milk prices climbed to a then record high. The number dropped to a low of 24 cents in 2009 when margins hit rock bottom and milk checks fell to a then-modern day low.
What happens to the remaining 64 cents from consumers?
That money goes toward processing, transportation, retailers, and other venders in the supply chain. The transportation portion has been taking a larger and larger portion due to issues induced from the pandemic.
Not all dairy products are equal, as some return more or less revenue to dairy farmers.
Corey Geiger
June 26, 2023
hoards.com
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