2014-01-27 03:21:11 - Dairy Product Production in the US - Industry Market Research Report - a new market research report on companiesandmarkets.com
During the past five years, the United States Dairy Product Production market has benefited from an increasing popularity of yogurt and cheese products in the United States and abroad, which has offset declining fluid milk consumption.
In addition, dairy producers have largely been able to pass along raw milk costs, which have risen 1.7% during the five years to 2013. While demand for some industry products increased during the past five years, an exception to this growth trend occurred in 2009, when industry revenue experienced a 15.7% decline. This was due to an overall reduction in consumer spending as a result of the recession, a drop in raw milk prices and lower global demand. Overall, industry revenue is expected to grow
at an annualized rate of 0.5% to total $100.2 billion during the five years to 2013; this includes an expected decline of 0.3% from 2012 to 2013.
Dairy product wholesalers and retailers have consolidated during the past five years in order to more effectively compete for national supply contracts from dairy producers, which cut costs related to purchasing dairy products. Increased concentration in downstream markets required producers to supply vendors on a national scale, and the ability to compete on price became important for securing national sales contracts.
However, rising feed costs caused raw milk input costs to increase, which forced producers to raise prices. Buyers are willing to pay higher prices to a certain extent, so to achieve lower per-unit costs (and achieve national scale), many dairy producers merged. Consequently, the number of enterprises is expected to fall 0.2% per year on average to 729 during the five years to 2013.
Throughout the next five years, rising disposable household income stemming from the economic recovery is expected to boost dairy product demand and producer revenue. Producers are anticipated to introduce innovative products that cater to changing consumer tastes, continuing a trend over recent years. Meanwhile, rising feed costs will slightly hamper profit expansion, and competition from overseas dairy producers will temper revenue growth.
Overall, the industry is forecast to grow moderately during the five years to 2018, with revenue rising at an annualized rate of 1.1% to $105.8 billion.
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