Did lockdowns change the utilisation of milk in 2020?

By Patty Clayton

It is well known that the various lockdowns in 2020 saw consumption move away from hospitality and foodservice and into the home. During the year, all major dairy categories saw retail growth, helping to offset some of the lost demand from the out of home market.

Here, we’ve looked at whether these shifts in consumption have affected how milk was utilised by manufacturers.

Overall, the amount of milk available to processors was roughly the same as the previous year at 15bn litres. Interestingly, the split between milk allocated to liquid vs manufacturing products in 2020 also remained unchanged. With the closure of a large portion of the foodservice and hospitality sectors, it was expected that more of the milk produced in the GB would have needed to be processed into shelf stable products. However, this doesn’t appear to be the case, with the strong increase in demand for liquid milk in retail markets compensating for lower demand elsewhere.

On the manufacturing side of the market, there were some deviations from recent trends in the distribution of milk among products.

Over the previous 5 years (2015-19), increasing volumes of milk have been allocated to the production of cheese, butter and yoghurts in the UK. Conversely, less of the milk taken in by dairies has been used for liquid milk and milk powders. The volumes allocated to cream production has been more variable, moving in line with milk availability.

During 2020, higher volumes of milk were directed to yoghurt, cream and cheese production than in the previous year. The increased throughput of milk for yoghurt is in line with the general upward trend in usage witnessed in recent years. For cream, the higher retail sales of cream will have been behind the increase.

Cheese also followed trend, and used more milk in 2020, with Cheddar recording the largest year-on-year increase. Part of this growth is reversing the lower volumes utilised in 2019, but the large uplift in retail sales will have been the main driver. More milk was also used in the production of territorial cheese. This was predominantly used for long-life varieties, which had seen some growth in 2019 as well.

Butter has been using increasing volumes of milk over the past few years, and this trend continued last year. Although there was only a small increase in milk used for butter in 2020, this followed a high production year; in 2019, an additional 68m litres went into butter production, an increase of 21% on 2018.

Milk powder production was the main area where less milk was used during the year. Following a large jump in volumes going into powder production in 2019, the volumes directed into this product fell back to 2018 levels. The higher retail demand for fresh milk, along with strong demand for milk for cheese production, meant less need to put milk into powders. The lower spring peak, due to active curbing by farmers, would have also been a factor.

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