Iowa Agricultural and Home Economics Special Report Experiment Station Publications 11-1955 Methods and costs of processing and delivering fresh concentrated milk in rural areas K. L. Utter Iowa State College W. S. Rosenberger Iowa State College H. Homme Iowa State College Geoffrey Shepherd Iowa State College Follow this and additional works at: http://lib.dr.iastate.edu/specialreports Part of the Agriculture Commons Recommended Citation Utter, K. L.; Rosenberger, W. S.; Homme, H.; and Shepherd, Geoffrey, "Methods and costs of processing and delivering fresh concentrated milk in rural areas" (1955). Special Report. 11. http://lib.dr.iastate.edu/specialreports/11 This Book is brought to you for free and open access by the Iowa Agricultural and Home Economics Experiment Station Publications at Iowa State University Digital Repository. It has been accepted for inclusion in Special Report by an authorized administrator of Iowa State University Digital Repository. For more information, please contact [email protected]. STAT NOV 18'955 METHODS AND COSTS OF PROCESSING AND DELIVERING FRESH CONCENTRATED MILK IN RURAL AREAS By K. L. Utter, W. S. Rosenberger, H. Homme and Geoffrey Shepherd Department of Dairy Industry Department of Economics and Sociology SPECIAL REPORT NO. 14 Agricultural Experiment Station— Iowa State College Ames, Iowa— November, 1955 CONTENTS Page Foreword ................1.............................g............._........................................................... 3 Summary ............ ................ ................................................................... 3 Introduction .... ................ .................................. _...........................__ 5 Development of methods for processing fresh concentrate ......................................... 5 Several processing difficulties .................. ............................................... ................ 6 Keeping quality .... ............................................................... ......... .............. 7 Analysis of rural delivery routes in central Io w a ........................................................10 Characteristics of rural consumers of fresh concentrate....................................... 10 Consumer reaction to the quality of fresh concentrate ..... ................. ;........... ...11 Rural delivery of fresh concentrate in central Illinois.......................... ^ ................... 11 Estimating the costs of rural delivery of fresh concentrate........................................... 11 Costs of processing fresh concentrate....................................... 12 Case 1— A complete processing plant where only fresh concentrate is produced ............... 12 Case 2— An existing manufacturing plant to which is added the neces­ sary equipment required to process fresh concentrate.....................................14 Case 3— Adding fresh concentrate to an existing Grade A processing plant ...................... 15 Case 4— Processing fresh concentrate with all the required facilities available ............... 15 Comparison of costs for cases 1, 2, 3 and 4 ............................................................. 15 J FOREWORD This project, based on field studies in Iowa and Illinois, evaluates a development which is of potential application throughout the North Central states. It is an Iowa contribution to the work of the North Central Regional Committee on Dairy Marketing Research (N CM -12). In considerable measure, the project has been financed by regional funds and carried out under the general supervision of the regional technical com­ mittee. The project is one of a series of studies of new developments in milk distribution. The studies were made in the region by a subcommittee of the regional technical committee which has been known as the “ fluid milk distribution subcommittee.” SUMMARY The Department of Dairy Industry of Iowa State Another study was made to determine whether or College started marketing fresh concentrated milk in not the characteristics of the customers differed from rural areas in July, 1951. Five experimental rural de­ their neighbors who weren’t buying fresh concentrate. livery routes were established within a four-county area T o make this comparison, customers were compared around Ames. The concentrate was sold to a vendor with their respective county averages, as listed in the who delivered it to rural customers on a one-delivery- 1953 annual farm census report for Iowa. The charac­ per-week basis. Soon after the process was perfected teristics compared included size of the farm, acres of at Iowa State College, Prairie Farms Creamery adapted corn, acres of hay and the number of milk cows, beef it to facilities at their Henry, 111., plant. Prairie Farms cattle and hogs per farm. The concentrate customers added fresh concentrate to previously established coun­ seemed to have slightly larger households, more acres try cream pickup routes in a 13-county area. of corn, more beef cattle and fewer dairy cows than The processing procedures and sales experiences in their neighbors. Thus, it would seem that sales of fresh these rural markets in central Iowa and central Illinois concentrate are more likely to be successful in non­ are the basis for the present study. The study attempts dairying areas. to ( 1) outline the methods for processing fresh con­ T o test the findings in the Iowa studies, a similar centrate, (2) discover something about the character­ study was made of the rural delivery routes in central istics of fresh concentrate customers, (3) estimate costs Illinois. In comparing the results of the two studies, for delivering fresh concentrate to rural areas and (4) no significant differences were found. It seems, there­ estimate the costs of processing fresh concentrate. fore, that the characteristics found in the Iowa survey PROCESSING would apply to other similar market areas. The following procedure for processing fresh con­ centrate is recommended: COSTS OF DELIVERY (1) Clarify and standardize Grade A milk to 3.5 The estimated costs of delivering fresh concentrate to percent butterfat. rural areas were about 10.7 cents per quart of con­ (2) Pasteurize at 180° F. for 16 seconds. centrate. (3) Homogenize the milk at 2,500 pounds pressure COSTS OF PROCESSING and cool to 125-130° F. The costs of processing fresh concentrate were esti­ (4) Condense to slightly over a 3:1 concentration mated for four different plant situations or cases. The in a stainless steel vacuum pan. costs of processing fresh concentrate in a plant pro­ (5) Pasteurize the concentrate at 180° F. for 20 to ducing only fresh concentrate are considered as Case 1. 25 seconds and cool to 40° F. In cases 2 and 3, the costs of processing are considered (6 ) Add pasteurized water to reduce the concen­ for adding fresh concentrate to an existing manufactur­ trate to exactly 10.5 percent butterfat. ing plant and to an existing Grade A plant. Costs in a RURAL CUSTOMERS plant which already has all necessary processing equip­ A questionnaire survey was made in the Iowa area ment available are considered as Case 4. to determine the characteristics of the 340 customers The costs for each case were computed for nine and to discover some factors which affect the sales of levels of output, based on multiples of 750 quarts per fresh concentrate in rural areas. Three factors were week— the amount which one man was selling each chosen as most likely to explain the variation in sales. week in central Iowa. Processing costs were found to These factors were: (1) the number of dairy cows on be highest in Case 1, followed by Case 2. Next highest the farm, (2) size of the household and (3) size of the was Case 3. Processing costs were lowest for Case 4, farm. The number of dairy cows on the farm showed where the product was added to a plant which has all an inverse relation to sales. The size of the household the necessary processing facilities available. The costs and the size of the farm showed a direct relation to in cases 1, 2 and 3 decrease as the output increases, sales. But the three factors together explained only 20 but at a declining rate. The costs in Case 4 are not percent of the variation in sales. affected by volume. 3 I 84 T' Wv'\ \ wj,'V s , , s n 78 — 1 72 — 1 66 — 1 60 |* 1 54 - 1 48 is > v 1* ' ' 4 2 . 1 1 ' " ' » 1 i 1 \ 36 n \ 1 \ \ \ _ ' 1 \ 30 IH M 24 h i CASE 1 1 8 V CASE 2 COSTS IN CENTS PER QUART OF CONCENTRATE OF QUART PER CENTS IN COSTS " s , I , 1 2 CASE 3 - ¿rCASE 4 6 0 3,750 7,500 11,250 5,000 RATE OF OUTPUT PER WEEK (QUARTS OF CONCENTRATE) Fig. 1. Cost estimates for producing fresh concentrated milk at different rates of output for cases 1, 2, 3 and 4. (Case 1, single product plant; Case 2, concentrate equipment added to existing manufacturing plant; Case 3 concentrate equipment added to existing Grade A plant; Case 4, plant having all equipment.)’ Methods and Costs of Processing and Delivering Fresh Concentrated Milk in Rural Areas1 by K. L. U tter, W. S. Rosenberger , H. H omme and G eoffrey Shepherd Fresh concentrate in its present form is a relatively 125° F. and concentrated to approximately a 3:1 con­ new product. It is made by a refinement of the process centration, using a 16-inch stainless steel vacuum pan. used in making the more familiar condensed or evapo­ The product actually was over concentrated and then rated milk. The process consists primarily of removing standardized to 10.5 percent butterfat by adding the water to decrease the bulk of the milk