Here’s an update on news impacting your dairy during the week before Christmas 2023.

Natzke dave
Dave Natzke
Editor / Progressive Dairy

Whole milk in school: What’s next?

On Dec. 13, the House of Representatives approved the Whole Milk for Healthy Kids Act (H.R. 1147). Approved on a 330-99 bipartisan vote, the bill expands milk options that schools can choose to serve in the National School Lunch and Breakfast Program.

A day later, an effort seeking to approve the bill on unanimous consent in the Senate was blocked by Sen. Debbie Stabenow (D-Michigan), chair of the Senate Ag Committee. While still possible that the bill could advance in the Senate, Stabenow said school milk standards should be addressed in upcoming development of the Dietary Guidelines for Americans, 2025-30.

School meal program options have been limited to nonfat and low-fat (1%) varieties since 2012. Both the House and Senate bills allow schools to add reduced-fat (2%) and whole (3.25% milkfat) milk options.

After implementation of milk option restrictions in 2012, milk consumption in schools dropped. Students consumed 288 million fewer half-pints of milk from 2012-15 and 213 million fewer half pints from 2014-16, even as public school enrollments grew, according to the National Milk Producers Federation (NMPF).

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In 2017, the USDA allowed hardship-based exemptions to school nutrition standards so they could serve flavored low-fat (1%) milk. That rule became permanent in early 2019 but was later revised. A survey of over 300 schools that offered low-fat flavored milk during the 2017-18 school year found that 58% of schools saw an increase in milk sold, and 82% of schools found it easy or very easy to include low-fat flavored milk within their overall calorie maximums.

Read: Dairy getting upgrade in school feeding programs and USDA rule permanently expands school milk options

In April 2023, the International Dairy Foods Association (IDFA) established the “Healthy School Milk Commitment,” a pledge by dairy companies to reduce calories and added sugars in flavored milk served in school feeding programs. Beginning with the 2025-26 school year, 37 school milk processors – representing more than 90% of the school milk volume in the U.S. – pledged to cut school milk options to no more than 10 grams of added sugar per 8 fluid ounce serving.

The U.S. Department of Health and Human Services (HHS) and the USDA appointed 20 nutrition and public health experts to serve on the 2025 Dietary Guidelines Advisory (DGA) Committee last January. That committee will hold three meetings in 2024 (Jan. 19, May 30 and Sept. 28, 2024) to review scientific evidence, with release of DGA 2025-30 planned in 2025.

Federal Reserve may be cutting interest rates in 2024

Meeting on Dec. 12-13, the Federal Reserve Board held interest rates for federal funds steady at 5.25%-5.5%. The board also hinted that they expect to make three quarter-point rate cuts in 2024, possibly beginning in summer.

The Federal Reserve’s Federal Open Market Committee (FOMC) meets eight times a year. The meeting schedule for 2024 has not yet been posted.

CoBank: Dairy growth will continue, exports remain a wild card

CoBank’s year-ahead rural outlook report indicates the upside potential for dairy demand faces some uncertainty moving into the new year. Dairy product sales should grow, led by cheese, butter and yogurt. However, that growth will be at a slightly slower pace as U.S. consumers will be pressured by reduced household savings, growing credit card debt and higher interest rates.

Ultimately, the wild card is international demand as the world’s growing middle class craves more high-quality proteins. If global dairy demand picks up, the U.S. is poised to fill orders as the other major dairy export regions all show signs of static milk production growth. Lower feed costs and improved cow productivity should spur additional U.S. milk production.

Read the CoBank Knowledge Exchange 2024 outlook report.

Coming up this week

  • The USDA’s latest Milk Production report, reflecting preliminary estimates for November and revised October production totals, is released after today’s newsletter and will be posted on the Progressive Dairy website.
  • Other USDA reports to be released this week include updates on cull dairy cow marketing on Dec. 21, and dairy product cold storage data on Dec. 22.

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