The dairy industry is suffering from falling demand at a time when prices are rock bottom. How can that happen?
In economics we learn that when price falls consumption should rise. So what happened to milk? The supermarket milk wars should have resulted in higher consumption but the decline in consumption has coincided with lower prices.
It’s not hard to see what has happened. Producers, faced with lower prices, found ways to lower quality (remember permeate) and as a consequence the poorer product has been less appealing to consumers. After all, price may influence your purchase, but it is flavour and the general appeal of the product that makes people consume the white stuff in the fridge. If they lose confidence in its goodness they will have negative thoughts about consuming. The industry’s advertising even told people that milk was bad for you, if you consumed the A1 protein. That’s not going to do anyone good.
Supermarkets degraded the quality of the product; advertisers created negative sentiments; and manufacturers were found actually contaminating (using permeate) to lower their costs. They have reaped what they sowed.
I have actually increased my milk consumption since I found natural organic full cream milk is quite delicious, just like it used to be. I only consume about a litre a week, but it’s delightful. And it only costs me $3.50.