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Development and application of a processing model for the Irish dairy industry
U Geary1, N Lopez-Villalobos, D J Garrick
1Livestock Systems Research Department, Animal and Grassland Research and Innovation Centre, Teagasc, Moorepark, Fermoy, Co. Cork, Ireland. una.geary@teagasc.ie
A new model evaluates milk processing, estimating milk value based on composition and product mix. Jersey milk consistently yielded higher milk values across different processing scenarios.
Area of Science:
- Dairy Science
- Agricultural Economics
- Food Processing Engineering
Background:
- Milk processing involves complex steps from collection to product manufacture.
- Optimizing milk value requires understanding the interplay of milk composition, product portfolio, and market prices.
- Previous models may not fully capture the economic impact of diverse milk compositions on processing outcomes.
Purpose of the Study:
- To develop and apply a processing-sector model for simulating milk collection, standardization, and product manufacture.
- To estimate milk product yield, net milk value, and component values based on various inputs.
- To analyze the economic impact of different milk compositions and product portfolios on milk's net value.
Main Methods:
- Developed a simulation model incorporating milk collection, standardization, and diverse product manufacturing (cheese, butter, powders).
- Quantified volume-related and product-related costs, including fixed operating costs.
- Estimated net milk value and component values (fat, protein) using marginal rate of technical substitution.
- Evaluated two product portfolio scenarios (2000 and 2008 Irish milk pool) with three distinct milk compositions (Irish Holstein-Friesian, Jersey, New Zealand Holstein-Friesian).
Main Results:
- The model successfully estimated product yield, net milk value, and component values under different scenarios.
- Jersey milk consistently demonstrated a higher value per liter compared to Irish and New Zealand Holstein-Friesian milk in both scenarios.
- Scenario 2 (2008 product mix) generally resulted in higher milk values per liter than Scenario 1 (2000 product mix).
Conclusions:
- Milk composition significantly impacts processing costs, product yield, and overall milk value.
- The product portfolio plays a crucial role in determining the economic returns from milk processing.
- The developed model provides a valuable tool for dairy processors to optimize operations and assess the economic implications of milk sourcing and product diversification.
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