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J Dairy Sci. 2013 Jul;96(7):4519-22. doi: 10.3168/jds.2012-6541. Epub 2013 May 6.

Short communication: planning considerations for on-farm dairy processing enterprises.

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  • 1Department of Animal and Food Sciences, University of Kentucky, Lexington 40546, USA.

Abstract

Across the world, more dairy producers are considering on-farm dairy processing to add value to the milk produced on their farms. Dairy producers may bottle milk or process their milk into cheese, ice cream, butter, yogurt, or cream. The primary objective of this research was to establish a series of sound factors or indicators of success for those considering on-farm processing. A survey was employed to collect opinions and advice from managers of on-farm processing enterprises. Surveys were distributed online (n=120), with 31 surveys returned, accounting for a 25.8% response rate. Most (64%) respondents had been involved in on-farm dairy processing for less than 10 yr. Sixty-one percent of respondents attained a positive cash flow in 1 to 3 yr. The primary products manufactured were cheese (69%), milk (59%), ice cream (31%), yogurt (25%), and butter (21%). Factors influencing the decision to start an on-farm dairy processing enterprise included commodity milk prices (61%), desire to work with the public (41%), an opportunity to promote the dairy industry (39%), a desire to maintain or expand a small family operation (29%), and product differentiation (16%). Respondents cited dealing with regulations (26%), product marketing (19%), manufacturing technicalities (19%), and securing funding (17%) as the most difficult parts of starting the business. Open-ended responses provided by the respondents of this survey were also documented to give future dairy producers advice. The most common advice to future on-farm processors was to work on realistic business plans, develop and follow realistic budgets, and observe and use market surveys within the industry. These results provide a useful array of information for future on-farm dairy processing enterprises.

Copyright © 2013 American Dairy Science Association. Published by Elsevier Inc. All rights reserved.

PMID:
23660143
[PubMed - indexed for MEDLINE]
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