Report: U.S. Dairy IndustryStructure, Regulatory Framework Lead to Consistent Underperformance

Although filled with fine, hard-working people who produce high-quality nutritious food, the U.S. dairy industry significantly underperforms its potential. In a global market where consumers clamor for dairy foods rich in protein, calcium and nutrients, the U.S. dairy industry is a follower and a price taker. Big segments of the industry are in long-term decline, and others are significantly less-developed and innovative than in other first-world countries.

In this free SupplySide Beverage Insights report on the U.S. dairy industry, Gregg Engles details how the industrys structure and regulatory frameworkdeveloped decades ago in response to conditions that are no longer relevantpit industry participants against one another, and seek to shield parts of the industry from competition rather than embracing the market. Perceived beneficiaries under the regulatory framework have effectively prevented its fundamental premises from being questioned. The regulatory market distortions have generally grown through the years, not diminished. Because of the regulatory environment, the industry spends more time thinking about how to divide the pie, and less time thinking about how to grow it.

Four harmful factors of the regulatory environment include:

If these areas were addressed, all of the industrys participantsfrom farmers to manufacturers to consumerswould ultimately benefit, and the United States would enjoy a larger, more profitable and enduring dairy industry in the years to come.