Yogurt is one of those foods that came out of obscurity in the last 20 years to a place of growing prominence in the U.S. dairy case and the diet of American consumers.

If you’re sick, yogurt makes you feel good. It’s something you can eat on an upset stomach. If you’re lactose intolerant, you can eat it without fear (and without a lactaid pill). If you’re trying to lose weight, it’s a major source of more protein and less carbs. If you’re lifting to build muscle mass, it’s a staple. It’s considered one of “five foods that fight fatigue” according to MSN Health and Fitness. Picky children even like it.

The rage 20 years ago was the dessert concept of frozen yogurt as an alternative to ice cream. The rage today seems to be variations on yogurt as a healthy-eating concept. One trend is toward adding probiotics for health. Another is the smoothie drink products that combine fruit and yogurt. And the latest talk centers on the up-and-coming ‘Greek’ yogurt (trust me, there’s a difference) we see showing up in the dairy case now.

It’s no wonder that U.S. yogurt production has enjoyed a dozen years of consecutive growth as production more than doubled from 1.84 billion pounds in 2000 to 3.85 billion pounds in 2009.

The CEO of Dannon Inc., Gustavo Valle, told attendees of the Reuters Food and Agriculture Summit this week that U.S. yogurt consumption can double again in the next four years as the market is still “underdeveloped” compared with yogurt consumption in Western Europe. Valle reported Dannon’s sales were up 15% in the second half of 2009 and again in the first quarter of 2010.

Yogurt production in the U.S. increased 7.2% last year compared with 2008. Production for January 2010 was up 10% compared with January 2009.

With yogurt being such a strong performer as a solid growth market—coupled with the fact that it is a fresh market that replaces some of the lost per-capita consumption of fluid milk—many experts involved in milk marketing point to this market as the new frontier. Future milk pricing policy must begin to define these important markets and return more of this value to dairy farmers.

Together, yogurt, and fresh Italian cheeses (like mozzarella), are a big part of dairy’s big picture. They are made for the market, not for the Merc (CME).