CROOKSTON, Minn. — The Agricultural Utilization Research Institute’s (AURI) Agricultural Innovation Center, which is funded by the United States Department of Agriculture (USDA) Rural Development program, recently released an A2 Milk Market Assessment. The report discusses A2 milk trends in Minnesota and is free to view on AURI’s website.
“AURI recognized growing interest from dairy farmers in A2 genetics. We decided to examine market information around this topic and make data available to dairy producers to help make informed choices,” says Sanchez Philocles, a market research analyst at AURI who conducted the study. “Resources like this report further AURI’s goal to help farmers evaluate value-added agricultural and new market opportunities.”
A2 is one of two common forms of beta-casein, a protein component in milk. Although most milk is a mix of both A1 and A2 beta caseins, there has been a recent trend to breed cows to produce milk with only A2 beta casein because of anecdotal information that points to A2 milk being more gut-friendly. (It should be noted there is insufficient research to support this claim conclusively.)
The report assesses two aspects of A2 milk: the supply of A2 milk at the dairy farm level and the demand for A2 milk in the retail case.
Regarding the supply of A2 milk, the study uses data from a 2024 survey distributed to Minnesota dairy farmers and public information from genetics companies and the dairy industry.
Key findings on the supply of A2 milk include:
· 44% of dairy farmer survey respondents have converted cows to A2 genetics, among which, 35% have begun to convert, and 9% have completed the conversion process.
· Of those that have converted their herds, 82% have done so because of perceived consumer interest.
· A 2023 study of one dairy genetics cooperative showed that 70% of a Holstein bull lineup that prioritized A2 milk production saw little impact on other genetic traits.
On the demand side, AURI interviewed Minnesota retailers about their experience with A2 products and analyzed retail sales data of A2 products, including fluid milk, yogurt, ice cream, cheese, and sour cream. The data covered retail stores in the North Central Region of the U.S., including Minnesota, Wisconsin, Ohio, Indiana, Nebraska, and North and South Dakota.
Key findings on the demand for A2 milk include:
· The A2 market consists of multiple local, national, and international brands selling A2 dairy products.
· From 2022 to 2024, sales of all A2 dairy products increased.
· Supplementary product claims – such as grass-fed and organic, among others – in addition to A2, appear to drive sales.
More data findings for both A2 milk supply and demand can be found in the report.
After analyzing all data of the study, AURI offers these key takeaways:
· The number of cows that will be converted to A2 genetics in Minnesota in the next five years will likely increase.
· Dairy farmer survey respondents see A2 milk as a trending market opportunity even i without receiving a premium price.
· Dairy processors in Minnesota have not driven dairy farmer interest in A2 milk.
· In retail, A2 fluid milk is the largest sales category, but growth rate is slower compared to other A2 dairy products like yogurt and ice cream.
· Data indicates future growth potential across all A2 milk product categories.
The report also includes a case study of one Minnesota dairy producer who produces and sells A2 milk – Joel Hendrickson, owner of Ten Finns Creamery in Menahga, Minnesota. Hendrickson shares his motivation for producing A2 milk, market positioning and development strategies, along with plans for the future.
To read or download the full A2 Milk Market Assessment report and other reports about emerging value-added opportunities, go to AURI’s Agricultural Innovation Center Research Reports webpage.
