Implications of on-farm segregation for valuable milk characteristics

Milk composition varies between herds and cows within herds, enabling its segregation on farm, rather than during processing, for the manufacture of specific dairy products. Benefits may include increased product yields, reduced processing costs and greater suitability of differentiated milk for the production of high value niche market products. However, costs are also likely to be greater. An integrated spreadsheet model was developed to determine the break-even premium required for a farmer with a seasonal calving herd to be economically no worse off producing segregated than conventional milk. The model incorporated breeding (quantitative and qualitative traits), cow requirements and feeding, transport, and economic sub-models. Cows were segregated within herd and milk composition was altered over time by genetic selection. Four quantitative trait ("white" milk colour) scenarios and two qualitative trait (BB beta-lactoglobulin milk) scenarios were considered. The model suggested that "white" milkfat would need to earn 38.4% more at the farm gate than conventional milkfat for the two systems to break even. "White" milk cows produced less than their status quo counterparts due to the reduced selection pressure on production milk traits and this had a considerable impact on the premium, as did the low initial volumes of white milkfat. The difference in production between the B beta-lactoglobulin cows and their status quo counterparts was less than for selection on white milkfat only. The high risk to farmers of discontinuing a differentiated milk policy could be moderated by changing the structure of premium payments over time. Hence, processing companies and farmers will need to work together to facilitate the uptake of milk segregation. This research model could be applied by dairy companies and farmers considering milk segregation policies.