Changes in income and retail milk prices affect type of milk purchased by U.S. households

Consumers can buy fluid milk in a variety of forms and at a variety of prices. A recent ERS report looked at purchases of milk products that contained three different fat contents, came in two container sizes, and were produced by either conventional or organic methods. In 2007-08, conventionally produced, low-fat milk in a gallon container was the most frequently bought fluid milk product (28 percent of all milk purchases), while organic milk in all fat contents and container sizes accounted for 3 percent of milk purchases. The researchers analyzed how changes in milk prices and household income affect purchase frequency among fluid milk products. They found that an increase in income or overall milk prices raises the probability that the household will purchase low fat milk. An increase in household income also raises the probability of purchasing organic milk. In general, the demand for organic milk is more sensitive to swings in income and price than is the demand for conventional milk. This chart is based on data in the ERS report, Households’ Choices Among Fluid Milk Products: What Happens When Income and Prices Change?, released April 16, 2013.

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