Like an estimated two-thirds of the worldās population, I donāt digest lactose well, which makes the occasional latte an especially pricey proposition. So it was a pleasant surprise when, shortly after moving to San Francisco, I ordered a drink at Blue Bottle Coffee and didnāt have to askāor pay extraāfor a milk alternative. Since 2022, the once Oakland-based, now NestlĆ©-owned cafe chain has defaulted to oat milk, both to cut carbon emissions and because lots of its affluent-tending customers were already choosing it as their go-to.
Plant-based milks, a multibillion-dollar global market, arenāt just good for the lactose intolerant: Theyāre also better for the climate. Dairy cows belch a lot of methane, a greenhouse gas 25 times more potent than carbon dioxide; they contribute at least 7 percent of US methane output, the equivalent emissions of 10 million cars. Cattle need a lot of room to graze, too: Plant-based milks use about a tenth as much land to produce the same quantity of milk. And it takes almost a thousand gallons of water to manufacture a gallon of dairy milkāfour times the water cost of alt-milk from oats or soy.
But if climate concerns push us toward the alt-milk aisle, dairy still has price on its side. Even though plant-based milks are generally much less resource-intensive, theyāre often more expensive. Walk into any Starbucks, and youāll likely pay around 70 cents extra for nondairy options.
. Dairyās affordability edge, explains MarĆa Mascaraque, an analyst at market research firm Euromonitor International, relies on the industryās ability to produce āat larger volumes, which drives down the cost per carton.ā American demand for milk alternatives, though expected to grow by 10 percent a year through 2030, canāt beat those economies of scale. (Globally, alt-milks arenāt new on the sceneācoconut milk is even mentioned in the Sanskrit epic MahÄbhÄrata, which is thousands of years old.)
What else contributes to cow milkās dominance? Dairy farmers are āpolitical favorites,ā says Daniel Sumner, a University of California, Davis, agricultural economist. In addition to support like the āDairy Checkoff,ā a joint government-industry program to promote milk products (including the āGot Milk?ā campaign), theyāve long raked in direct subsidies currently worth around $1 billion a year.
Big Milk fights hard to maintain those benefits, spending more than $7 million a year on lobbying. That might help explain why the US Department of Agriculture has talked around the climate virtues of meat and dairy alternatives, refusing to factor sustainability into its dietary guidelinesāand why it has featured content, such as a 2013 article by thenāAgriculture Secretary Tom Vilsack, trumpeting the dairy industry as āleading the way in sustainable innovation.ā
But the USDA doesnāt directly support plant-based milk. It does subsidize some alt-milk ingredientsāsoybean producers, like dairy, net close to $1 billion a year on average, but that crop largely goes to feeding meat- and dairy-producing livestock and extracting oil. A 2021 report by industry analysts Mintec Limited and Frost Procurement Adventurer also notes that, while the inputs for dairy (such as cattle feed) for dairy are a little more expensive than typical plant-milk ingredients, plant alternatives face higher manufacturing costs. Alt-milk makers, Sumner says, may also have thinner profit margins: Their āstrategy for growth is advertisement and promotion and publicity,ā which isnāt cheap.
Starbucks, though, does benefit from economies of scale. In Europe, the company is slowly dropping premiums for alt-milks, a move it attributes to wanting to lower corporate emissions. āMarket-level conditions allow us to move more quicklyā than other companies, a spokesperson for the coffee giant told me, but didnāt say if or when the price drop would happen elsewhere.
In the United States, meanwhile, itās a waiting game to see whether the government or corporations drive down alt-milk costs. Currently, Sumner says, plant-based milk producers operate under an assumption that āprice isnāt the main thingā for their buyersāas long as enough privileged consumers will pay up, alt-milk can fill a premium niche. But itās going to take a bigger market than that to make real progress in curbing emissions from food.
Hereās why dairy should be subsidized. Because all farms should be subsidized. Most of our food production needs to be subsidized to prevent bad economic shifts creating financial hardships that sink farms and lead to a food shortfall.
I mean, hereās a microcosm for you. Some seafood verticals had price swings recently, and when the swings hit bottom, it was actually cheaper to keep the boat in port than go out for a trip. If the swings remained or kept going down, it would have tanked some of the smaller fishing companies. So when that swing would end, the shortage of production would have the opposite effect - dramatically higher fish prices. Yes, thatāll get people back into the industryā¦ bigger businesses that will carefully milk the increased prices instead of simply increasing food availability.
Now, the way dairy and and beef farms are subsidized is a problem right now. Even most farmers are against it. Most dairy farms donāt get a penny (and in fact, PAY IN. Iām not kidding), while the larger factory farms get their feed fully paid for and large scale production subsidized.
That does mean youāre probably not actually seeing a penny of price savings from the subsidies. People tend to forget that when blaming subsidies in the price of milk vs plant-milk.