Terry Childs

1
DFAs New Milk Protein Concentrate Initiative

• Presented by Fonterra (USA) Inc
• Terry Childs
• Director, Business Development
• On Behalf of DairiConcepts LLP

2

• Who is DAIRICONCEPTS?
• Why we were Created?
• Introduction to Portales, NM
• Applications for MPC
• Membrane uses / Restriction on Dairy
• A Review of Import and Export data

3
FONTERRA
Annual Sales US 5.2 BILLION

4
Annual Sales US 6.7 BILLION

5
DFA 6.7 BILLION
FONTERRA 5.2 BILLION
Food Ingredients Division NZMP Key
Ingredients
EQUALS
6
Leverage the strengths of two powerful, global
dairy organizations

• DFA brings high quality milk supply and Fonterra
  brings protein technology and expertise.
• Allows a focused business approach to meeting our
  customers requirements.
• World-class technical support, global reach,
  local touch.
• Latest cheese flavor technology is available.
• Spray-drying expertise and on-going development
  capabilities.
• Dedicated team of highly motivated and focused
  professionals.

7
Bruce, WI
Bruce, WI
Winsted, MN
GVC
Pollock, SD
Hummelstown, PA
Eldorado Springs, MO
Springfield, MO (Corporate Office Canning Line)
Portales, NM
8
MPC Dairy Blends NFDM
Cream

9

• Milk Processing Plant at Portales, New Mexico

Portales
10
Portales New Mexico Milk Production

• Portales milk supply comes from 100 mile radius
  Plant process 5 million pounds/ day
• NM farm size average 2933 acres
• Average dairy herd size 536 cows
• Average Pounds produced per year per cow
• 20,750 lbs of milk per year

11
WET PROCESS
12
DRY PROCESS
13
NFDM
NFDM
separator
pasteurizer
MPC
evaporator
ultra filtration
drier
filtermat
spray
existing
new
packing
14
Milk Protein Concentrate

• Able to produce a range of protein contents.
• Current focus, 70 protein.
• Drivers Depend on application either
  functionality/nutrition.
• Bland flavor, highly soluble milk proteins.

15
Milk Protein Concentrate

• Applications
• Used in all applications where low lactose and
  clean flavor profiles are important
• e.g.
• Nutritional Formulas
• Processed Cheese
• Cultured Products
• Cream Cheese
• Convenience Foods

16
High protein MPCs are preferred ingredients in
applications
Cheese
Low Lactose
Nutritional Products
MPC
Processed Cheese
Milk
Infant Formula
High Lactose
High Whey protein
High Casein protein
17
Processed Cheese

• MPC Offers manufacturers
• Less issues with flavor profile and level of
  intact protein.
• Ability to standardize the proteinfat ratio of
  the formulation ensuring consistent end product.
• Significant handling and processing advantages.

18
Milk Protein Concentrate Facts and Myths
19
Milk Protein Concentrate
Main Body Text Slide This slide is for the main
body of your presentation. You can change the
layout of this slide by going to menu item
Format Slide layout (select an appropriate
layout such as two columns, slide with tables
or charts etc) To add more slides, use menu
item Insert New Slide. Do not add too much
text to a slide. Presentation slides have more
impact if text is kept short and simple and is
spread across a number of slides. Word count
guide for this page is approximately 100
words. Fonts to be used Click to add title
Arial 31 points Click to add text Arial 26
points Sub titles within body copy should be
Arial Bold. Keep Line spacing to one line to
assist with legibility. The default font for
bullets is Arial. If Arial is not installed on
your computer the alternative font is Wingdings.
Please refer to the README for instructions on
how to change the bullet font. Note By default,
when you add text to this slide, a bullet point
will be applied. If you do not want a bullet
point to appear, select the text and click on the
bullets button on the toolbar or use the menu
item Format Bullet uncheck the Use a
bullet option.

• Ultrafiltered Product made from Fresh milk
• Anything else is a blend or formulated ingredient
  and should be labeled accordingly
• Dry Blend of Casein and Whey Proteins

20
Ultrafiltration
Main Body Text Slide This slide is for the main
body of your presentation. You can change the
layout of this slide by going to menu item
Format Slide layout (select an appropriate
layout such as two columns, slide with tables
or charts etc) To add more slides, use menu
item Insert New Slide. Do not add too much
text to a slide. Presentation slides have more
impact if text is kept short and simple and is
spread across a number of slides. Word count
guide for this page is approximately 100
words. Fonts to be used Click to add title
Arial 31 points Click to add text Arial 26
points Sub titles within body copy should be
Arial Bold. Keep Line spacing to one line to
assist with legibility. The default font for
bullets is Arial. If Arial is not installed on
your computer the alternative font is Wingdings.
Please refer to the README for instructions on
how to change the bullet font. Note By default,
when you add text to this slide, a bullet point
will be applied. If you do not want a bullet
point to appear, select the text and click on the
bullets button on the toolbar or use the menu
item Format Bullet uncheck the Use a
bullet option.

• Is a membrane separation technology that has been
  used by the food industry for more than 30 years
• The dairy industry has led the field 30 years ago
  but where are we now?

21
Food Industry using Membrane Technology
Main Body Text Slide This slide is for the main
body of your presentation. You can change the
layout of this slide by going to menu item
Format Slide layout (select an appropriate
layout such as two columns, slide with tables
or charts etc) To add more slides, use menu
item Insert New Slide. Do not add too much
text to a slide. Presentation slides have more
impact if text is kept short and simple and is
spread across a number of slides. Word count
guide for this page is approximately 100
words. Fonts to be used Click to add title
Arial 31 points Click to add text Arial 26
points Sub titles within body copy should be
Arial Bold. Keep Line spacing to one line to
assist with legibility. The default font for
bullets is Arial. If Arial is not installed on
your computer the alternative font is Wingdings.
Please refer to the README for instructions on
how to change the bullet font. Note By default,
when you add text to this slide, a bullet point
will be applied. If you do not want a bullet
point to appear, select the text and click on the
bullets button on the toolbar or use the menu
item Format Bullet uncheck the Use a
bullet option.

• Water purification
• Wine and beer filtering
• Fruit and vegetable juice processing
• Egg product processing
• Functional soy protein isolates
• The rest of the food industry has embraced this
  technology and has reaped the benefits in quality
  and cost.

22
Missed opportunity?
Main Body Text Slide This slide is for the main
body of your presentation. You can change the
layout of this slide by going to menu item
Format Slide layout (select an appropriate
layout such as two columns, slide with tables
or charts etc) To add more slides, use menu
item Insert New Slide. Do not add too much
text to a slide. Presentation slides have more
impact if text is kept short and simple and is
spread across a number of slides. Word count
guide for this page is approximately 100
words. Fonts to be used Click to add title
Arial 31 points Click to add text Arial 26
points Sub titles within body copy should be
Arial Bold. Keep Line spacing to one line to
assist with legibility. The default font for
bullets is Arial. If Arial is not installed on
your computer the alternative font is Wingdings.
Please refer to the README for instructions on
how to change the bullet font. Note By default,
when you add text to this slide, a bullet point
will be applied. If you do not want a bullet
point to appear, select the text and click on the
bullets button on the toolbar or use the menu
item Format Bullet uncheck the Use a
bullet option.

• Are we allowing ourselves to be blinded by our
  focus on import restrictions and industry
  regulations so as not to see the value of and
  opportunity for membrane technology in the Dairy
  Industry?

23
Impact of Regulations
Main Body Text Slide This slide is for the main
body of your presentation. You can change the
layout of this slide by going to menu item
Format Slide layout (select an appropriate
layout such as two columns, slide with tables
or charts etc) To add more slides, use menu
item Insert New Slide. Do not add too much
text to a slide. Presentation slides have more
impact if text is kept short and simple and is
spread across a number of slides. Word count
guide for this page is approximately 100
words. Fonts to be used Click to add title
Arial 31 points Click to add text Arial 26
points Sub titles within body copy should be
Arial Bold. Keep Line spacing to one line to
assist with legibility. The default font for
bullets is Arial. If Arial is not installed on
your computer the alternative font is Wingdings.
Please refer to the README for instructions on
how to change the bullet font. Note By default,
when you add text to this slide, a bullet point
will be applied. If you do not want a bullet
point to appear, select the text and click on the
bullets button on the toolbar or use the menu
item Format Bullet uncheck the Use a
bullet option.

• On-farm Membrane Processing, or is it?

Reference California Department of Food and
Agriculture
24
On-Farm Membrane Processing
Main Body Text Slide This slide is for the main
body of your presentation. You can change the
layout of this slide by going to menu item
Format Slide layout (select an appropriate
layout such as two columns, slide with tables
or charts etc) To add more slides, use menu
item Insert New Slide. Do not add too much
text to a slide. Presentation slides have more
impact if text is kept short and simple and is
spread across a number of slides. Word count
guide for this page is approximately 100
words. Fonts to be used Click to add title
Arial 31 points Click to add text Arial 26
points Sub titles within body copy should be
Arial Bold. Keep Line spacing to one line to
assist with legibility. The default font for
bullets is Arial. If Arial is not installed on
your computer the alternative font is Wingdings.
Please refer to the README for instructions on
how to change the bullet font. Note By default,
when you add text to this slide, a bullet point
will be applied. If you do not want a bullet
point to appear, select the text and click on the
bullets button on the toolbar or use the menu
item Format Bullet uncheck the Use a
bullet option.

• Milk is not pasteurized, but simply
  concentrated for transport to the processor.
• The membrane concentrated raw milk is allowed
  to be used in cheese, yogurt, ice cream and other
  dairy products.
• Its a great idea, but why the limitations?

25
Perspective What is milk? What are milk
products?
Main Body Text Slide This slide is for the main
body of your presentation. You can change the
layout of this slide by going to menu item
Format Slide layout (select an appropriate
layout such as two columns, slide with tables
or charts etc) To add more slides, use menu
item Insert New Slide. Do not add too much
text to a slide. Presentation slides have more
impact if text is kept short and simple and is
spread across a number of slides. Word count
guide for this page is approximately 100
words. Fonts to be used Click to add title
Arial 31 points Click to add text Arial 26
points Sub titles within body copy should be
Arial Bold. Keep Line spacing to one line to
assist with legibility. The default font for
bullets is Arial. If Arial is not installed on
your computer the alternative font is Wingdings.
Please refer to the README for instructions on
how to change the bullet font. Note By default,
when you add text to this slide, a bullet point
will be applied. If you do not want a bullet
point to appear, select the text and click on the
bullets button on the toolbar or use the menu
item Format Bullet uncheck the Use a
bullet option.

• Milk

Water Protein casein whey Fat Lactose
Minerals
Separate and Concentrate
Products
26
Perspective What is milk? What are milk
products?
Main Body Text Slide This slide is for the main
body of your presentation. You can change the
layout of this slide by going to menu item
Format Slide layout (select an appropriate
layout such as two columns, slide with tables
or charts etc) To add more slides, use menu
item Insert New Slide. Do not add too much
text to a slide. Presentation slides have more
impact if text is kept short and simple and is
spread across a number of slides. Word count
guide for this page is approximately 100
words. Fonts to be used Click to add title
Arial 31 points Click to add text Arial 26
points Sub titles within body copy should be
Arial Bold. Keep Line spacing to one line to
assist with legibility. The default font for
bullets is Arial. If Arial is not installed on
your computer the alternative font is Wingdings.
Please refer to the README for instructions on
how to change the bullet font. Note By default,
when you add text to this slide, a bullet point
will be applied. If you do not want a bullet
point to appear, select the text and click on the
bullets button on the toolbar or use the menu
item Format Bullet uncheck the Use a
bullet option.
MPC
Cheese
Protein casein Fat Some Minerals Residual
Lactose
Protein casein whey Fat Some
Minerals Residual Lactose
Lactose Some minerals
Protein whey Lactose Some minerals
27
Perspective What is milk? What are milk
products?
Main Body Text Slide This slide is for the main
body of your presentation. You can change the
layout of this slide by going to menu item
Format Slide layout (select an appropriate
layout such as two columns, slide with tables
or charts etc) To add more slides, use menu
item Insert New Slide. Do not add too much
text to a slide. Presentation slides have more
impact if text is kept short and simple and is
spread across a number of slides. Word count
guide for this page is approximately 100
words. Fonts to be used Click to add title
Arial 31 points Click to add text Arial 26
points Sub titles within body copy should be
Arial Bold. Keep Line spacing to one line to
assist with legibility. The default font for
bullets is Arial. If Arial is not installed on
your computer the alternative font is Wingdings.
Please refer to the README for instructions on
how to change the bullet font. Note By default,
when you add text to this slide, a bullet point
will be applied. If you do not want a bullet
point to appear, select the text and click on the
bullets button on the toolbar or use the menu
item Format Bullet uncheck the Use a
bullet option.
Cheese WPC Salts
MPC Milk Fat EMC Salts
Prepared Cheese Product
Protein casein whey Fat Some
Minerals Residual lactose
28
Lets talk about Dairy Trade
Main Body Text Slide This slide is for the main
body of your presentation. You can change the
layout of this slide by going to menu item
Format Slide layout (select an appropriate
layout such as two columns, slide with tables
or charts etc) To add more slides, use menu
item Insert New Slide. Do not add too much
text to a slide. Presentation slides have more
impact if text is kept short and simple and is
spread across a number of slides. Word count
guide for this page is approximately 100
words. Fonts to be used Click to add title
Arial 31 points Click to add text Arial 26
points Sub titles within body copy should be
Arial Bold. Keep Line spacing to one line to
assist with legibility. The default font for
bullets is Arial. If Arial is not installed on
your computer the alternative font is Wingdings.
Please refer to the README for instructions on
how to change the bullet font. Note By default,
when you add text to this slide, a bullet point
will be applied. If you do not want a bullet
point to appear, select the text and click on the
bullets button on the toolbar or use the menu
item Format Bullet uncheck the Use a
bullet option.
29
Lets put it in terms of protein
Main Body Text Slide This slide is for the main
body of your presentation. You can change the
layout of this slide by going to menu item
Format Slide layout (select an appropriate
layout such as two columns, slide with tables
or charts etc) To add more slides, use menu
item Insert New Slide. Do not add too much
text to a slide. Presentation slides have more
impact if text is kept short and simple and is
spread across a number of slides. Word count
guide for this page is approximately 100
words. Fonts to be used Click to add title
Arial 31 points Click to add text Arial 26
points Sub titles within body copy should be
Arial Bold. Keep Line spacing to one line to
assist with legibility. The default font for
bullets is Arial. If Arial is not installed on
your computer the alternative font is Wingdings.
Please refer to the README for instructions on
how to change the bullet font. Note By default,
when you add text to this slide, a bullet point
will be applied. If you do not want a bullet
point to appear, select the text and click on the
bullets button on the toolbar or use the menu
item Format Bullet uncheck the Use a
bullet option.
Net Trade Imports - Exports
30
Net Trade Protein Basis
Main Body Text Slide This slide is for the main
body of your presentation. You can change the
layout of this slide by going to menu item
Format Slide layout (select an appropriate
layout such as two columns, slide with tables
or charts etc) To add more slides, use menu
item Insert New Slide. Do not add too much
text to a slide. Presentation slides have more
impact if text is kept short and simple and is
spread across a number of slides. Word count
guide for this page is approximately 100
words. Fonts to be used Click to add title
Arial 31 points Click to add text Arial 26
points Sub titles within body copy should be
Arial Bold. Keep Line spacing to one line to
assist with legibility. The default font for
bullets is Arial. If Arial is not installed on
your computer the alternative font is Wingdings.
Please refer to the README for instructions on
how to change the bullet font. Note By default,
when you add text to this slide, a bullet point
will be applied. If you do not want a bullet
point to appear, select the text and click on the
bullets button on the toolbar or use the menu
item Format Bullet uncheck the Use a
bullet option.

• For milk and protein products (Chapter 4
  Harmonized Tariff Schedule), US is a net
  exporter.
• For whey products (Chapter 4 35Harmonized
  Tariff Schedule), US is a
  net exporter.
• For casein and caseinate (Chapter 35 Harmonized
  Tariff Schedule), US is a net importer.

31
Net Trade and MPC
Main Body Text Slide This slide is for the main
body of your presentation. You can change the
layout of this slide by going to menu item
Format Slide layout (select an appropriate
layout such as two columns, slide with tables
or charts etc) To add more slides, use menu
item Insert New Slide. Do not add too much
text to a slide. Presentation slides have more
impact if text is kept short and simple and is
spread across a number of slides. Word count
guide for this page is approximately 100
words. Fonts to be used Click to add title
Arial 31 points Click to add text Arial 26
points Sub titles within body copy should be
Arial Bold. Keep Line spacing to one line to
assist with legibility. The default font for
bullets is Arial. If Arial is not installed on
your computer the alternative font is Wingdings.
Please refer to the README for instructions on
how to change the bullet font. Note By default,
when you add text to this slide, a bullet point
will be applied. If you do not want a bullet
point to appear, select the text and click on the
bullets button on the toolbar or use the menu
item Format Bullet uncheck the Use a
bullet option.

• Yes, the US is a net importer of casein and
  caseinate.
• But casein and caseinate imports have been static
  for more than 6 years
• Casein is old separation technology.
• The future opportunities are for membrane
  technology UF concentrates and UF powder (Milk
  Protein Concentrate)
• Portales is positioned to capture this MPC growth