The economics of [milk protein content] standardization market viewpoint
1995
Nyborg, N.J. (Danish Dairy Board, Aarhus (Denmark))
For decades there has been a tendency towards relatively increasing prices for skim milk powder and cheese and during the same period the relative butter price has declined. As a result, the actual yield price for milk protein is far higher than the yield price for fat. As a consequence, in most dairy countries, the protein content of milk has been included as a parameter in the payment system. Whereas standardization of milkfat in market milk has been common practice for years in most countries, standardization of the protein content has not yet been legalized. As filtration techniques are now available for the dairy industry, the economic pressure to optimize the yield of protein becomes stronger. At the same time, it is only fair to offer products with guaranteed protein content to consumers, just as the industry should examine the demand for protein-enriched products. Based on expected standards for protein in liquid milk powder, savings of the raw material for these products are calculated. The costs involved in processing are briefly assessed. The consequences of standardizing according to the above standards are calculated, using EU as an example. Finally, the consequences for product prices and ex-farm prices and the competitiveness of dairy products in relation to other foods are discussed as well as the possible impact on market balance and quota regulations.
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