SALEM — Retail sales of dairy products remain strong, but the closure of dine-in eateries during the coronavirus shutdowns has pushed overall dairy demand down 10%, an analyst says.

While people are still eating, most generally eat a bigger meal at restaurants than they do at home, Katie Burgess, director of risk management for Blimling and Associates, said during the latest Dairy Business Association’s “Dairy Stream” podcast.

Prices for milk, cheese and butter are at their lowest levels since 2009, she said.

“That being said, we have seen a number of restaurants pivot successfully to delivery and takeout,” she said.

Deliveries and takeout were already at 75% of pizza sales and 60% to 70% of fast food sales. They’ve doubled for some casual dining chains to 30% to 40% and increased 20% or more for some steak chains, she said.

Those sales are likely to increase over the next few months as people get tired of cooking at home, and people will be ready to get back out to restaurants once it’s finally safe, she said.

Before COVID-19 hit, consumer expenditures at grocery stores and food service were on equal footing. March data show grocery store sales increased 25% while food service sales fell 25%, she said.

“Once we start to feel more comfortable, by the end of this year, I think we’ll see those numbers begin to converge again,” she said.

Once people are free to leave their houses they are going to want to travel, go out to eat and get together with friends, she said.

“The long-term trend is that food service sales have been growing, outpacing grocery store sales. And so I think that we’ll get back to that historical growth in food service,” she said.

As for dairy exports, she thinks it’ll be touch-and-go until there’s a vaccine against the virus.

Sales to Asia have been a little better, but she’s keeping her eye on Mexico — the largest market for U.S. dairy. Exports there seem to have slowed, she said.

the peso is relatively weak compared to the U.S. dollar and commerce has generally slowed, she said.

But she sees COVID-19’s disruption of export markets as a hiccup and not necessarily a reversal in long-term trends, she said.

Before the pandemic, the U.S. was making big strides in selling more dairy products into Asia, there was lots of optimism about China and opportunity to sell more in Mexico, she said.

“Once we get through this, I think there’s still going to be a great demand there for dairy products. U.S. dairy producers are well positioned to help serve a growing global market. And because of that I believe that we will see exports rebound once we make it to the other side,” she said.

As things stand today, U.S. cheese prices are some of the lowest in the world. While that’s not great news for milk checks in the months ahead, it hopefully means the U.S. will be able to move some of the domestic surplus offshore, she said.

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