“Milk producers” are milk farmers. “Milk processors” buy milk from producers and process it for the retail market. Some role players, of course, are both, and the reader will find many of these listed under heading 5 (see the “Dairies and milk processors” subheading). In order to survive, many farmers have extended their activities beyond the farmgate and are involved in both the “field” and “fork” parts of the value chain.
This chapter covers the processing side, the dairy secondary industry: milk powder, flavoured milk, cheese, cottage cheese, feta cheese, maas (Amazi), yoghurt, evaporated and condensed milk, cheese powder, buttermilk, cream, sour cream, butter, and milk itself – pasteurised, long-life or ultra-high temperature treated (UHT).
2. International business environment
- www.fil-idf.org, website of the International Dairy Federation provides global dairy statistics.
- A sister websites, www.dairy-sustainability-initiative.org provides “a global framework for a holistic approach to sustainability in the dairy value chain”.
- Find the current world production, market and trade reports at www.fas.usda.gov/commodities/dairy.
- The monthly Dairy Market Trends provides the latest statistics on the dairy industry, including breakdowns of imports and exports. Find it on www.mpo.co.za. The Quarterly Review, prepared by the MPO and SAMPRO (see heading 6), does the same. Find it at www.milksa.co.za.
3. Local business environment
- Find news on the BMi Research into drinking yoghurt in the Bizcommunity article “Drinking yoghurt increases in volume, value” at http://www.bizcommunity.com/Article/196/162/164987.html#more.
- Cheese and long-life are milk champions. Find the annual Bureau for Food and Agricultural Policy (BFAP) outlook scenarios at www.bfap.co.za.
4. Notes on adding value to your milk
Milk is a “cash crop” and most people are users and cash buyers (including your neighbours!) The question is: should you sell fresh milk or add value by producing and selling fermented products (amasi, yoghurt, cream cheese)?
Adding value to your milk
You can nearly double your turnover on the same amount of milk with relatively little extra cost of pasteurising and additives, and definitely make money out of a small-scale dairy.
- There is also the cost of additives – culture medium, stabiliser, flavourant (like vanilla) and yellow colouring agent.
- Keep an eye on Eskom costs in future – pasteurizers chew power!
- Competition from the “Big boys” means that making milk-powder, long-life milk and butter is not recommended, even if you could afford the very expensive equipment.
What is needed for producing fermented products?
- Firstly a nearby market that will buy your product
- Electricity from Eskom – not generated off diesel or petrol power (too expensive)!
- A Batch Pasteurizer – say big enough for 1 or 2 days milk production 4. A warm room (for Amasi) to mature the fermented product; (or your thermostatically controlled batch pasteurizer for other products like yoghurt).
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