Abstract:

There is an increasing interest in specialty milk products such as soymilk, cholesterol free/lactose free (CFLF) milk and organic milk. While the market shares of these milk types are still small, specialty milk consumption is one of the fastest growing consumer segments in the dairy industry. Therefore, it is of interest to producers, consumers as well as the policy-makers to identify the consumer profile of these products and to determine policies based on the consumer choices. In the article, there are utilised the actual consumer sales data to see whether the USDA’s dairy policy follows the consumers’ milk preferences. The results indicate that the household demographics significantly affect milk preferences. Race is by far the most striking factor in the consumers’ decision process. Minority households have a much higher probability of purchasing specialty milk types than the white households. They are also loyal customers of the specialty milk types and are less responsive to the changes in factors that affect their purchase decision. Based on these findings, there is recommend an alternative policy to the USDA’s one-size-fits-all type of dairy guidelines.    

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