The Butterfat Boom Has Just Begun

Corey Geiger

November 6, 2023

Key Points

  • Once cast as nutritional villains due to their high saturated fat content, full-fat dairy products fell out of favor beginning in the 1970s. Nutrition research in the past 15 years suggests full-fat dairy has a much more nuanced role – and potentially protective effect – on health, and consumers have responded.
  • From 1966 to 2010, butterfat production levels in farm milk held in a tight range of 3.65% to 3.69%, initially due to demand lost to margarine and later, health concerns. Since nutritional science moderated its stance on saturated fats, butterfat composition has been on a meteoric climb, moving to a record 4.08% in 2022.
  • U.S. milk and butterfat production both had parallel growth at 24%, respectively, from 1995 to 2010. Then from 2011 to 2022, butterfat pounds grew by 27% while total milk pounds shipped fell off the pace at just 15% growth.
  • Domestic demand has been the biggest driver for butterfat as consumers are eating rather than drinking their dairy these days. Long-term demand trends indicate butter, cheese, cream for upscale coffees, ice cream, and other frozen desserts will continue to grow.
  • Export markets are also a significant opportunity for butterfat. When measured on a milkfat basis, the U.S. exported just 5.9% of its milk production as dairy products in 2022. Dairy product exports leapt to 23.4% when measured on a skim-solids basis after butterfat has been skimmed from milk prior to manufacturing those dairy products.

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