Dairy Initiatives

Dairy

Department of Animal Science

D A I R Y   I n i t i a t i v e s   N E W S L E T T E R
V o l u m e   8      I s s u e   2      F a l l   1 9 9 9

Producing for Consumer Markets

NADINE MILLER, Land O'Lakes, Inc.

In the new millennium, milk will be marketed beyond dairy foods. Most milk now goes into the carton, butter, or cheese. In the future, producers' milk will be broken down into what marketers call a "bundle of attributes." The value of producers' milk will be based more than ever on what it contains, where it goes, and what it's used for.

"If you produce a product without an established market, it's easy to end up with an oversupply that's not in demand," says Chris Policinski of the Land O'Lakes dairy foods value-added group. "Getting close to consumers and understanding their needs is more critical than ever when it comes to developing profitable markets for producers' milk." Three trends, among many, will have an increasing effect on the demand for raw milk:

Convenience.  Dual-career families, single parents, and more active lifestyles mean meals on the go and more demand for single serving, portable milk products.

Moderation.  The pendulum has swung between lowfat foods and indulging in higher-fat products. Consumers are back to balanced, more healthful eating. Dairy products now range from no-fat sour cream to lowfat milk to full-fat butter.

Nutraceuticals.  Components of milk will see more use as ingredients in medicine and cosmetics, according to Mike Fronk, Land O'Lakes vice president of sales and marketing.

Another emerging market is whey. Once fed to livestock or spread on fields, today whey proteins are processed into ingredients in everything from hot chocolate mix to processed meats. Fronk says, "Milk quality is critical. The amount and quality of proteins in producers' milk affects our whey products and their properties."

Policinski and Fronk suggest producers consider these key market questions:

• How close is your dairy to a milk plant or a major consumer market?
• What's the end use for your milk? Does it go to a cheese plant where kappa casein or B lactoglobulin to improve cheese yields might have additional value? Genetic organizations now test sires for these and other gene markers so producers can select for these traits.
• Does your milk go to a fluid plant that might not want specific enzymes that deteriorate flavor?
• Are there new or specialty market opportunities for your milk or components of your milk?

In the long run, producers who produce the components that consumers want at the lowest cost will be the most profitable.

D A I R Y    I n i t i a t i v e s    N E W S L E T T E R
Volume 8     Issue 2    Fall 1999

Dairy Initiatives

Dairy

Department of Animal Science