Technology, Demand and Lost Data

1
Technology, Demand and Lost Data

• Mark Stephenson, Ph.D.
• Cornell Program on Dairy Markets Policy

2
Milk Components Have Been Recognized for a Long
Time!

• In 1905, a Mr. H.E. Cook wrote The experiments
  at the Wisconsin and New York State stations
  proved so conclusively that the fat content
  measured the cheese-making power of milk so much
  more accurately than the scales (cwt) alone, that
  we began paying on that basis in 1893.

3
Food Scientists are Busy!

• We have been separating milk into cream and skim
  fractions for many years
• In the lab, membranes, ion exchange and other
  processes are now separating milk into many
  smaller fractions.
• They are demonstrating technical feasibility
• How much will it cost in a plant?
• What is the market for the fractions?

4
Many Implications for Milk Refineries

• Simple exampleSeparate casein and whey proteins
  from skim milk fraction.
• Send whey fractions to fluid plant
• Whey protein is more digestible
• Send casein to cheese plant
• Much higher yield
• No whey to contaminate with salt and enzymes and
  further process.

5
Many Implications for Milk Refineries

• Simple exampleSend only what a cheese plant
  needs to make cheese
• No byproduct or waste stream
• Where is optimal plant location?

6
Value Added Production

• Milk has been a health delivery system for many
  years
• Vitamin A
• Nutriceuticals may be interesting
• High CLA milk is being produced
• Biotechnology can enable harvest of products
  from milk

7
Implications for Regulation

• Can the Federal Order system keep up?
• Chasing fractions to their end use seems
  impractical
• Unlikely to have a spot market for these
  fractions
• Can we use a survey and product formula approach
  to pricing

8
Implications for Structure

• Where will the fractionation take place?
• On farm
• Butter/powder or cheese plants
• New country milk stations(back to the future)

9
Conclusions

• More questions than answers
• Plants are already testing these ideas
• Progressive farmers are ready for the next big
  opportunity
• Some of the ideas will require education
• New product buyers
• Consumers