Economic and Marketing Information for Indiana Farmers (Jan. 31, 1968) |
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Economic and Marketing Information FOR INDIANA FARMERS Prepared by the Agricultural Staff of Purdue University, Lafayette, Indiana January 31, 1968 The Competitive Position of IMITATION MILK number OF FLUID milk substitutes—generally called imitation milk—are available to Indiana consumers. If consumers accept these products as a substitute for natural milk, there will be important implications for the Indiana milk producer as well as for Indiana agriculture in general. The purpose of this article is: (1) to describe the composition of imitation milk, (2) to produce information on ingredient costs of imitation milk relative to natural milk, (3) to discuss factors influencing consumer acceptance of imitation milk, and (4) to discuss some implications of imitation milk for Indiana agriculture. Composition of Imitation Milk Products Imitation milk products can be produced from a number of ingredients. A basic characteristic of all imitation milk is the existence oi vegetable fat in the milk. The vegetable fat most commonly used in imitation milk is coconut oil. There are, however, some blends of vegetable oil—including soybean oil—on the market which can be used in imitation milk. Aside from the common ingredient of vegetable fat, three different imitation milk products can be denned according to the ingredients contained in the solids-not-fat portion of the product. It is important to differentiate among these products because their implications for dairy and non-dairy agriculture are different. No uniform terminology has yet been developed for the three imitation milk products. As a result, they will simply be referred to as Type I, II, and III. Type I is simply a combination of skim milk, vegetable oil, and some emulsifiers and stabilizers. The skim milk used in the Type I may be either fresh skim milk or reconstituted non-fat dry milk. Some Type I might contain a combination of vegetable oil and butterfat. Type I can legally be marketed and is being distributed by several milk processing firms in Indiana. Currently most Type I is being distributed through supermarkets. The Federal Filled Milk Act prohibits the interstate shipment of filled milk. Type I falls within the definition of a filled milk and therefore cannot be shipped across state lines. As a result, all Type I milk distributed in Indiana must be processed in Indiana. Type II is generally made by combining water, vegetable oil, sodium caseinate, corn syrup solids, emulsifiers, and stabilizers. The distinguishing feature of Type II is the use of sodium caseinate as the source of protein. Casein is the protein component of milk. It is produced from nonfat dry milk by a manufacturing process that separates out the protein portion of milk in the form of sodium caseinate. Type II can also legally be marketed in Indiana. It is expected that it will be produced and distributed in Indiana Ronald D. Knutson, Agricultural Economics in the near future. Type II does not fall within the Federal Filled Milk Act definition of a filled milk. It can, therefore, be shipped freely in interstate commerce. Even though Type II contains sodium caseinate, an Arizona lower court has ruled that this product is not a milk product and therefore is not subject to the same sanitary and filled milk regulations as dairy products. However, these imitation products must meet the sanitary standards of other food products as established by the Federal Food and Drug Commission. It should be realized that the Arizona lower court decision is not final and is being appealed to a higher court. Type III is an entirely vegetable product. Although Type III is not yet on the market, it is anticipated that it will contain essentially the same ingredients as Type II except that the casein protein in Type II will be replaced by a vegetable protein such as the protein in soybeans. Considerable research is being done by leading manufactures of food and animal food products to develop a vegetable protein which will produce an acceptable Type III. Type III is not a dairy product, but it would be subject to the same sanitary regulations as other foods. Ingredient Costs One of the main factors influencing the competitive position of natural milk relative to imitation milk is the cost involved in producing the different products. The cost involved in producing these products may be divided into two groups—processing cost and ingredient cost. Both Type I and Type II can be and are being produced in fluid milk processing plants. Little extra equipment is involved in processing the imitation products relative to fluid milk products. However, in the beginning, imitation product volume will likely be small and unit processing costs will be expected to be somewhat higher than on more conventional fluid milk items. Imitation milk also adds at least one item to the processors product mix. This also implies higher unit processing costs. The extent to which these imitation milk processing costs are higher than regular milk processing costs would be expected to vary both from plant to plant and over time. It is, therefore, difficult to provide specific information on the costs involved in processing imitation milk products. There are important differences in the cost of the ingredients involved in making imitation and natural milk products. For example, if milk used for bottling purposes —Class I milk—costs the processor $6 per hundredweight, the ingredient cost to the processor for one half-gallon of 3.5 per cent butterfat milk is 26.1 cents (Table 1). On the other hand, the ingredients for a 3.5 per cent coconut oil Type I which uses fresh skim milk bought at the Class I skim price would cost the processor 19-2 cents per half
Object Description
Title | Economic and Marketing Information for Indiana Farmers (Jan. 31, 1968) |
Purdue Identification Number | UA14-13-econ196801 |
Date of Original | 1968 |
Publisher | Purdue University. Agricultural Extension Service |
Subjects (LCSH) |
Farm produce--Indiana--Marketing Agriculture--Economic aspects--Indiana |
Genre | Periodical |
Collection Title | Extension Economic & Marketing Information (Purdue University. Agricultural Extension) |
Rights | Copyright Purdue University. All rights reserved. |
Coverage | United States - Indiana |
Type | text |
Format | JP2 |
Language | eng |
Repository | Purdue University Libraries |
Date Digitized | 05/01/2015 |
Digitization Specifications | Original scanned at 400 ppi on a BookEye 3 scanner using Opus software. Display images generated in Contentdm as JP2000s; file format for archival copy is uncompressed TIF format. |
URI | UA14-13-econ196801.tif |
Description
Title | Economic and Marketing Information for Indiana Farmers (Jan. 31, 1968) |
Purdue Identification Number | UA14-13-econ196801 |
Transcript | Economic and Marketing Information FOR INDIANA FARMERS Prepared by the Agricultural Staff of Purdue University, Lafayette, Indiana January 31, 1968 The Competitive Position of IMITATION MILK number OF FLUID milk substitutes—generally called imitation milk—are available to Indiana consumers. If consumers accept these products as a substitute for natural milk, there will be important implications for the Indiana milk producer as well as for Indiana agriculture in general. The purpose of this article is: (1) to describe the composition of imitation milk, (2) to produce information on ingredient costs of imitation milk relative to natural milk, (3) to discuss factors influencing consumer acceptance of imitation milk, and (4) to discuss some implications of imitation milk for Indiana agriculture. Composition of Imitation Milk Products Imitation milk products can be produced from a number of ingredients. A basic characteristic of all imitation milk is the existence oi vegetable fat in the milk. The vegetable fat most commonly used in imitation milk is coconut oil. There are, however, some blends of vegetable oil—including soybean oil—on the market which can be used in imitation milk. Aside from the common ingredient of vegetable fat, three different imitation milk products can be denned according to the ingredients contained in the solids-not-fat portion of the product. It is important to differentiate among these products because their implications for dairy and non-dairy agriculture are different. No uniform terminology has yet been developed for the three imitation milk products. As a result, they will simply be referred to as Type I, II, and III. Type I is simply a combination of skim milk, vegetable oil, and some emulsifiers and stabilizers. The skim milk used in the Type I may be either fresh skim milk or reconstituted non-fat dry milk. Some Type I might contain a combination of vegetable oil and butterfat. Type I can legally be marketed and is being distributed by several milk processing firms in Indiana. Currently most Type I is being distributed through supermarkets. The Federal Filled Milk Act prohibits the interstate shipment of filled milk. Type I falls within the definition of a filled milk and therefore cannot be shipped across state lines. As a result, all Type I milk distributed in Indiana must be processed in Indiana. Type II is generally made by combining water, vegetable oil, sodium caseinate, corn syrup solids, emulsifiers, and stabilizers. The distinguishing feature of Type II is the use of sodium caseinate as the source of protein. Casein is the protein component of milk. It is produced from nonfat dry milk by a manufacturing process that separates out the protein portion of milk in the form of sodium caseinate. Type II can also legally be marketed in Indiana. It is expected that it will be produced and distributed in Indiana Ronald D. Knutson, Agricultural Economics in the near future. Type II does not fall within the Federal Filled Milk Act definition of a filled milk. It can, therefore, be shipped freely in interstate commerce. Even though Type II contains sodium caseinate, an Arizona lower court has ruled that this product is not a milk product and therefore is not subject to the same sanitary and filled milk regulations as dairy products. However, these imitation products must meet the sanitary standards of other food products as established by the Federal Food and Drug Commission. It should be realized that the Arizona lower court decision is not final and is being appealed to a higher court. Type III is an entirely vegetable product. Although Type III is not yet on the market, it is anticipated that it will contain essentially the same ingredients as Type II except that the casein protein in Type II will be replaced by a vegetable protein such as the protein in soybeans. Considerable research is being done by leading manufactures of food and animal food products to develop a vegetable protein which will produce an acceptable Type III. Type III is not a dairy product, but it would be subject to the same sanitary regulations as other foods. Ingredient Costs One of the main factors influencing the competitive position of natural milk relative to imitation milk is the cost involved in producing the different products. The cost involved in producing these products may be divided into two groups—processing cost and ingredient cost. Both Type I and Type II can be and are being produced in fluid milk processing plants. Little extra equipment is involved in processing the imitation products relative to fluid milk products. However, in the beginning, imitation product volume will likely be small and unit processing costs will be expected to be somewhat higher than on more conventional fluid milk items. Imitation milk also adds at least one item to the processors product mix. This also implies higher unit processing costs. The extent to which these imitation milk processing costs are higher than regular milk processing costs would be expected to vary both from plant to plant and over time. It is, therefore, difficult to provide specific information on the costs involved in processing imitation milk products. There are important differences in the cost of the ingredients involved in making imitation and natural milk products. For example, if milk used for bottling purposes —Class I milk—costs the processor $6 per hundredweight, the ingredient cost to the processor for one half-gallon of 3.5 per cent butterfat milk is 26.1 cents (Table 1). On the other hand, the ingredients for a 3.5 per cent coconut oil Type I which uses fresh skim milk bought at the Class I skim price would cost the processor 19-2 cents per half |
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