Tasty Waste?
…No, Whey!
Mark Jenner, Ph.D.
Agricultural wastes are mostly
just resources out of place.
These wastes tend to be inputs
(nutrients or chemicals) that
reach the environment unused.
The solution for these
underdeveloped resources is to
identify ways to use them more
completely. It is an
efficiency problem – not a
compliance problem. Whey, an
underused product of cheese
making, has literally gone from
disposal in sewers to use as
food additives in soup. To
understand what it takes to
change a resource from a
disposal problem to a high value
product, it is useful to look at
the factors that have shaped the
increased value of whey and whey
products.
Roger Cryan[1],
Director of Economic Research
for the National Milk Producers
Federation, chronicled the
shifts in whey management from
disposal of whey solids in
sewers to refinement of whey
solids as valuable food
additives. This is an
excellent case study to
highlight the things that must
be done to move manure from its
perception as a waste to one as
a resource.
U. S. Cheese production has more
than doubled since 1975.
Nine pounds of whey are produced
for every pound of cheese.
Whey is mostly water (93%), but
a half pound of solids remain in
the whey for each pound of
cheese produced. These
solids can provide value, but it
is not easy to get to that value
in the form that it comes in
from the cheese vat.
Whey Economics, A Case of Supply
and Demand. When the
supply of whey overwhelms the
demand for whey, the price of
whey goes to zero. If the
handling costs of whey also
increase, then whey becomes an
economic liability. It
becomes a waste. As long
as the supply of whey can be
balanced with the demand for
whey, disposal costs of whey
will be near zero. If
demand for whey and whey
products increase, the value of
whey also increases. This
whey waste-to-resource story is
worth telling because cheese
production is increasing, so
whey production is also
increasing (nine pounds of whey
for every pound of cheese).
Even with more surplus whey, the
demand for whey and whey product
is still increasing.
This is no small achievement and
the story is not over. In
the past year, increased cheese
production has created a whey
surplus. Demand has not
kept up and the value of whey is
again low. When
demand increases, the value of
whey will recover.
A Brief History of Whey Use
- When milk was
handled in 10-gallon milk cans,
milk was delivered to the cheese
plant in the cans and whey was
sent back to the farm in the
milk cans. That pretty
much solved the disposal cost of
the cheese plant. For the
farmer, one hundred pounds of
fluid whey had about as much
nutritional value as a quarter
bushel of corn (14 pounds).
The disposal cost for the cheese
plant was near zero.
- The shift to bulk
tanks eliminated the low cost
whey disposal in 10-gallon
backhauls. Whey began to
be disposed of where it could
like the municipal sewer
systems. Before widespread
regulation, the disposal cost
was still nearly zero.
- With larger plants
and increased regulation there
were increased volumes of whey
with larger disposal costs.
As cheese plants began to pay
for disposal, the value of whey
became negative. The
effective price of a pound of
whey was less than zero.
The economics forced cheese
producers to find different,
more efficient uses for fluid
whey.
- Today, most of the
fluid whey is processed for
animal feeds with a growing
demand for food uses of whey.
Technology and demand have
cultivated markets for whey
lactose and whey proteins -
multiple markets from the same
quantity of whey solids.
Total demand for processed whey
products is increasing the value
of the next best use for whey
solids.
- New technologies
allow solids to be fractionated
relatively inexpensively.
Whey solids are high in lactose
(milk sugar) with some protein.
Milk replacers for pigs and
calves are a principal feed
market for whey solids.
- Commercial baking
and confectionery industries
have found uses for dried whey
solids in their food products to
enhance flavor and quality.
- New technology and
increased demand have created a
class of high-valued whey
protein concentrate products (WPC).
- New uses of whey
solids have developed in
higher-valued markets for
pharmaceuticals, infant formulas
and even anti-bacterial
treatments for meat. In
2000, 435 million pounds of whey
products were exported to other
countries.
Lessons to Take Home
1. Whey
economics are driven by how
closely the demand for whey
matches the supply of whey.
The solution to capturing the
unrealized value of whey lies in
market development and economics
not in environmental compliance.
Whey is, and always has been, a
residual food product. The
earlier disposal of whey through
the sewer systems was an
economic decision.
2. Efficiency
and innovation have greater
impacts on surplus nutrients and
energy than does compliance.
Compliance costs may have
increased the negative price for
whey (disposal costs), but it
has been gains in efficiency and
innovation that have increased
the positive price.
3. Separation
of different whey components
(water, protein and lactose) has
diversified the markets
available for multiple whey
products.
4. Product
definitions such as whey protein
concentrate (WPC) reduce the
cost of using these materials
because the product names convey
useful information (WPC-45 has a
protein content of 45%).
5. The
increased value of whey and whey
product contributes to cheese
production economic success, but
it is not an industry economic
windfall. The increased
value and revenues cover the
cost of technical innovation.
The increased revenues are
greater than the increased
costs.
6. Change
takes time. Dr. Cryan used
data back to 1975 to illustrate
the points in his paper.
Our government regulatory
programs must encourage
efficiency and innovation.
Current environmental policies
often destroy efficiency and
innovation with a simplistic,
single focus of regulatory
compliance. The solutions
to resource and environmental
issues are found in increased
economic value and use – not in
greater restrictions and
conservation. This case
study of the gains in whey
processing and marketing provide
an excellent example of how
increasing the demand for a
surplus resource moves it from a
waste to a positive good for the
economy.
Click Here for printable (.pdf)
version of this article.
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