Dairy Supply Chains Adapt as Consumers React to COVID-19

July 2020 -


Key Points

  • COVID-19 is dramatically affecting consumer habits and dairy supply chains as food service demand plummets and grocery sales surge.
  • Consumers struggling with job losses and economic uncertainty have quickly returned to buying basic dairy products like fluid milk, commodity cheese, and butter.
  • Product offerings at grocery stores have shrunk to meet the surge in consumer demand for basic dairy products.
  • As food service demand returns, wholesale prices for some dairy products have risen sharply with potential to accelerate retail prices for certain items, which would ostensibly have a negative impact on dairy product demand.
  • Consumer behavior will likely remain in its current state for the next 12 to 18 months. As the economy reopens, potential changes in consumer habits, the level of social distancing that remains in place, and the level of disposable income will again reshape dairy supply chains long term.

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