The True Cost of Milk Spoilage for Dairy Operations
India has significantly contributed to the global dairy industry through extensive dairy farming and a robust supply chain. Milk is one of the most essential commodities in this country, and yet it is also easily perishable. Dairies must aim to chill raw milk immediately after production, or it risks spoiling. With nationwide milk production so high, every litre spoilt translates into compounding losses. This is why, alongside efforts to strengthen the supply chain, it is also important to understand the monetary consequences of rejecting milk. In this article, we will explore the true cost of milk spoilage for dairies and what steps they can take to prevent it.
Where Do Dairies Face Milk Spoilage?
Milk goes through several stages of testing, analyzing, chilling, and heating before finally making it to someone’s morning cup of tea. This creates a lot of potential for raw milk to go bad even before it reaches the processing plant.
Some of the different stages where dairies face spoilage are:
At the Source: Poor hygiene practices can lead to various instances of contamination on the farm where milk is produced. This contamination may stem from cows suffering from diseases like mastitis or from equipment that hasn’t been cleaned regularly.
During Storage: Raw milk needs to be chilled to 4°C within an hour of production. Delayed cooling could cause bacteria to multiply at rapid speeds. However, even if the milk is immediately cooled, it must remain at that temperature throughout the journey till it reaches the dairy plant. Fluctuations in temperature while in storage could lead to spoilage of milk.
Collection and Reception: Cross-contamination with leftover residue milk in collection tankers could affect the whole batch, leading to huge losses. Similarly, when the milk reaches the reception centre at the dairy plant, it can spoil if stored in silos for too long.
These are just three out of several potential instances of milk spoilage within the dairy supply chain. This raises the question: what could be the cost of this loss?
Factors to Consider While Calculating Milk Spoilage Costs
To understand how dairies could calculate their estimated costs of the spoilage of milk and milk products, we will first take a look at the parameters tested in a sample of milk. Dairies usually check for:
- FAT %
- SNF %
- Added water
- Density
Together, these factors determine the final pay for the farmer bringing in the milk, and potential profits that dairies could make. However, when milk spoils, one might want to consider factors beyond procurement price when calculating losses. Milk spoilage could result in an impact on transportation expenses, handling labor, and even eventually put the brand reputation at risk.
So while the overall losses calculated are on the basis of procurement price and total volume of milk collected, the damage done is always beyond that.
Why is Milk Spoilage Costly for Dairies?
Milk spoilage affects more than the value of the discarded milk. Dairies also incur losses through transportation, handling, storage, testing, labor, and reduced processing efficiency. In severe cases, spoilage can impact customer trust and brand reputation, leading to long-term financial consequences.
Calculating the Costs of Milk Spoilage
To simplify this process, we need to consider three drivers for the equation:
- Total Volume of Milk Procured
- Procurement Cost
- Spoilage %
The cost of milk spoilage is the product of these three.
So:
Total milk volume x Procurement cost x Spoilage % = Cost of Milk Spoilage
Now that we know how often milk spoils and what the cost of it could be, let’s dive into a solution that could help dairies combat this.
Choosing the Right Cooling Solution to Avoid Milk Spoilage
Chilling milk instantly could solve most milk spoilage issues. However, maintaining the required temperature consistently can be challenging in regions where high ambient temperatures and power disruptions are common. In such conditions, dairy operators need more than just a cooling system. They need a solution that can continue protecting milk quality even when electricity supply is unreliable.
At Prompt, we believe that efficient and effective milk chilling mustn’t come at the cost of unreliable power grids, expensive diesel generators, or unsustainable technology. We built our Thermal Storage-based Bulk Milk Cooler (TSBMC) to fill this gap.
The TSBMC combines thermal energy storage, solar compatibility, and smart control to provide seamless cooling. The system continues to cool milk even if power isn’t available, while also ensuring the milk chills to 4°C within two hours. This means that dairies can preserve the freshness of the collected milk for a longer time, without running the risk of immediate spoilage.
A recent success story showed that the TSBMC could cut a dairy’s chilling costs by 53% and reduce its diesel dependency by over 90%. At the same time, it chilled milk 50% faster than diesel-driven operations, giving manufacturers independence from the grid and improving operational efficiency.
Conclusion
The dairy supply chain demands meticulous functioning to ensure fresh milk reaches consumers every day. However, any misses throughout the process will result in milk spoilage and subsequent losses. It is therefore crucial that dairies implement appropriate storage equipment along the way to chill milk and maintain its freshness.
Want to know how much milk spoilage could be costing your dairy?
Speak with our experts to assess your current losses and discover how Prompt’s TSBMC can help improve milk preservation and operational efficiency.
FAQs
A simple milk spoilage calculation is: Total Milk Volume × Procurement Cost × Spoilage Percentage = Cost of Milk Spoilage.
One should ideally cool raw milk to 4°C as quickly as possible after collection.
Dairies can reduce spoilage by rapidly chilling milk after collection and following strict hygiene practices.
It is an advanced milk chilling system that combines thermal energy storage and smart cooling technology to maintain cooling performance even during power disruptions.
Tracking spoilage helps dairies identify operational gaps, quantify losses, improve decision-making, optimize cold-chain performance, and protect profitability.
