Keep lactose above 4.2%. It’s valuable
Milk-lactose value has trebled since 2005, said Úna Geary and Laurence Shalloo, Teagasc researchers, at the Moorepark 2013 event during the summer.
Lactose is a valuable commodity, they said, with milk processors incorporating it into their payment system, in the case of Synlait, in New Zealand, and with FrieslandCampina proposing to include it soon in the payment system.
The value-per-kg of lactose, in both Synlait and FrieslandCampina, is relatively small compared to protein and fat values.
In Synlait and FrieslandCampina, the value-per-kg of lactose is 5.6 and 10 times lower than the protein value, respectively.
Geary and Shalloo said preliminary analysis for the Irish situation suggests that if lactose was introduced into the Irish milk-payment system, the value would be 10 times less than the value of protein, with the ratio dependent on the product portfolio and product market values.
The inclusion of lactose in the payment system would reduce the value of fat and protein, as the available money would be spread-out over three components.
Factors affecting milk value The researchers said milk-payment systems evolve over time and must respond to the external market changes.
Farmers should be paid for the components of their milk that add value, less the components that add costs.
While the implementation of the A+B-C system was initially slow, building on that system to incorporate the valuable components of milk should be encouraged over time.
They simulated milk-processing to evaluate the effect of various factors on milk value.
Examining national, average Holstein Friesian (HF), Jersey (J) and high-composition Holstein Friesian (HHF) milk showed that, across a year, there are gains of up to 25% in milk price by improving milk-solids composition through breeding.
Examining the national milk pool, they found that a herd with a mean calving date of mid-February, relative to mid-March, generated a value-per-kg of milk solids that was 0.9% higher, worth a potential milk value increase of €18m nationally.
Moving away from the current, national spring-calving model, to herds with a 50% spring- and 50% autumn-calving split-system, resulted in milk values-per-kg of fat being 6% lower, values-per-kg of protein being 10% higher, and overall milk price being 7% higher, when applied to the national milk pool.
However, when account was taken of the increased costs, at farm level, of a split-calving system, the spring-calving system was more profitable at industry level (farmer and processor) than the split-calving system, by €83m per annum, or 1.6 c/l.
Protein
The protein component of the payment system could also be modified in the future.
Protein is made up of about 80% casein and 20% whey, with the economic value of both changing dramatically in the past number of years.
In the past, whey was viewed as a waste product, but now is considered a valuable byproduct of cheese-processing.
Similar to France, the payment system may differentiate between total protein (true protein and non-protein nitrogen) and true protein, where non-protein nitrogen is a non-usable protein.
Milk is currently paid for based on kgs of protein and fat.
In the future, a better reflection of the protein component of milk may be based on either of these systems.
Modifying the payment system, to differentiate casein and whey from other milk proteins, or to differentiate between total and true protein, may be more profitable for both processor and farmer.
Animal Health
Elevated SCC, due to mastitis infection, has detrimental effects on raw-milk composition, cheese-processing and cheese composition.
At processor level, an increase in SCC, from 100,000 to 400,000 cells/ml, in the national milk pool has been shown to reduce the value-per-kg of milk solids by 3%, and reduced net revenue by €51.3m per annum.
A milk-payment system that captures the negative impact of SCC should be incorporated right across the industry in Ireland.
