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Whole milk return to schools may boost dairy demand and tighten butter supplies

A school milk supplier says USDA guidelines can cause dramatic ripple effects when changes are made.

Dairy Farmers of America Southwest Group Vice President Tim Hawk tells Brownfield when whole milk was removed from school menus in 2010, students reacted.

“The decline was steep, and the decline was quick,” he shares. “Kids aren’t used to drinking skim milk at home, they don’t drink skim milk at home is what the data says. They typically have whole.”

Recent analysis by the American Farm Bureau Federation finds student milk consumption declines jumped 77 percent after restrictions were put into place.

Hawk says the farmer-member cooperative currently supplies milk to about 25,000 schools, and the supply chain is preparing for a shift with the passage of the Whole Milk for Healthy Kids Act.

“Administratively, going through the systems, there’s school districts, there’s ISDs, there’s co-ops, there’s quite a few people we know they’ll be early adopters,” he says. “It will take some time. I’m not sure how long that will be. We’re judging the waters right now.”

AFBF estimates a near-universal shift could divert up to 66 million pounds of butter, or about three percent of U.S. production, into bottled milk. That shift could modestly tighten butter and cream supplies while lifting Class I utilization and overall blend prices.

AUDIO: Dairy Farmers of America Southwest Group Vice President Tim Hawk