Abstract
The economic value of solids components of milk should be a function of net returns from products in which the milk solids are used. An empirical procedure is illustrated to estimate the value of fat and protein in milk used to manufacture selected dairy products. Manufacturing costs were evaluated and divided into those that remain constant for a volume of milk regardless of solids content and those costs that change with the solids content of milk. Values of a .1% increase in the protein content in 100kg of milk used to manufacture hard cheese, nonfat dry milk, and cottage cheese were $.300, $.140, and $.446. Values of .1% increase in fat in 100kg of milk used to manufacture hard cheese and butter were $.364 and $.240. Values derived in this manner can be incorporated into multiple-component pricing plans by weighting each value by the proportion of the milk supply used for that product.
Published Version
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a call