DFA s New Milk Protein Concentrate Initiative
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1 DFA s New Milk Protein Concentrate Initiative Presented by Fonterra (USA) Inc Terry Childs Director, Business Development On Behalf of DairiConcepts LLP Page 1 of 31
2 Who is DAIRICONCEPTS? Why we were Created? Introduction to Portales, NM Applications for MPC Membrane uses / Restriction on Dairy A Review of Import and Export data Page 2 of 31
3 FONTERRA Annual Sales US $: 5.2 BILLION Page 3 of 31
4 Annual Sales US $: 6.7 BILLION Page 4 of 31
5 DFA $6.7 BILLION FONTERRA $5.2 BILLION Food Ingredients Division + NZMP Key Ingredients EQUALS Page 5 of 31
6 Leverage the strengths of two powerful, global dairy organizations DFA brings high quality milk supply and Fonterra brings protein technology and expertise. Allows a focused business approach to meeting our customers requirements. World-class technical support, global reach, local touch. Latest cheese flavor technology is available. Spray-drying expertise and on-going development capabilities. Dedicated team of highly motivated and focused professionals. Page 6 of 31
7 Bruce, Bruce, WI WI Winsted, MN Pollock, SD Hummelstown, PA GVC Eldorado Springs, MO Springfield, MO (Corporate Office & Canning Line) Portales, NM Page 7 of 31
8 MPC Dairy Blends NFDM Cream Page 8 of 31
9 Milk Processing Plant at Portales, New Mexico Portales Page 9 of 31
10 Portales New Mexico Milk Production Portales milk supply comes from 100 mile radius [ Plant process 5 million pounds/ day] NM farm size average: 2933 acres Average dairy herd size: 536 cows Average Pounds produced per year per cow 20,750 lbs of milk per year Page 10 of 31
11 WET PROCESS Page 11 of 31
12 DRY PROCESS Page 12 of 31
13 NFDM NFDM separator pasteurizer MPC evaporator ultra filtration drier filtermat packing spray existing new Page 13 of 31
14 Milk Protein Concentrate Able to produce a range of protein contents. Current focus, 70% protein. Drivers: Depend on application: either functionality/nutrition. Bland flavor, highly soluble milk proteins. Page 14 of 31
15 Applications: Milk Protein Concentrate Used in all applications where low lactose and clean flavor profiles are important; e.g. Nutritional Formulas Processed Cheese Cultured Products Cream Cheese Convenience Foods Page 15 of 31
16 High protein MPCs are preferred ingredients in applications Low Lactose Nutritional Products MPC Processed Cheese Cheese High Lactose Infant Formula Milk High Whey protein High Casein protein Page 16 of 31
17 Processed Cheese: MPC Offers manufacturers; Less issues with flavor profile and level of intact protein. Ability to standardize the protein:fat ratio of the formulation ensuring consistent end product. Significant handling and processing advantages. Page 17 of 31
18 Milk Protein Concentrate Facts and Myths Page 18 of 31
19 Milk Protein Concentrate Ultrafiltered Product made from Fresh milk Anything else is a blend or formulated ingredient and should be labeled accordingly Dry Blend of Casein and Whey Proteins Page 19 of 31
20 Ultrafiltration Is a membrane separation technology that has been used by the food industry for more than 30 years The dairy industry has led the field 30 years ago but where are we now? Page 20 of 31
21 Food Industry using Membrane Technology Water purification Wine and beer filtering Fruit and vegetable juice processing Egg product processing Functional soy protein isolates The rest of the food industry has embraced this technology and has reaped the benefits in quality and cost. Page 21 of 31
22 Missed opportunity? Are we allowing ourselves to be blinded by our focus on import restrictions and industry regulations so as not to see the value of and opportunity for membrane technology in the Dairy Industry? Page 22 of 31
23 Impact of Regulations On-farm Membrane Processing, or is it? Reference: California Department of Food and Agriculture Page 23 of 31
24 On-Farm Membrane Processing Milk is not pasteurized, but simply concentrated for transport to the processor. The membrane concentrated raw milk is allowed to be used in cheese, yogurt, ice cream and other dairy products. It s a great idea, but why the limitations? Page 24 of 31
25 Perspective What is milk? What are milk products? Milk Water Protein casein & whey Fat Lactose Minerals Separate and Concentrate Products Page 25 of 31
26 Perspective What is milk? What are milk products? Cheese Protein casein Fat Some Minerals Residual Lactose MPC Protein casein & whey Fat Some Minerals Residual Lactose Protein whey Lactose Some minerals Lactose Some minerals Page 26 of 31
27 Perspective What is milk? What are milk products? Cheese + WPC + Salts MPC + Milk Fat + EMC + Salts Prepared Cheese Product Protein casein & whey Fat Some Minerals Residual lactose Page 27 of 31
28 Let s talk about Dairy Trade Fluid and Dry Milk and Protein Products (MT) HTS Group Catergory Imports Exports Milk & Protein Products (Ch.4) Concentrated Milk 1,963 4,166 Dried Skim Milk 11, ,398 Dried Whole Milk (1) 30,533 11,491 Fluid Skim Milk Fluid Whole Milk 7,337 14,063 Milk Protein Concentrate 33,626 2,323 Milk & Protein Products (Ch.4) Total 84, ,410 Whey Products (Ch.4 & 35) Whey 13, ,057 Whey Protein Concentrate 25,371 28,383 Whey Products (Ch.4 & 35) Total 38, ,440 Protein Products (Ch.35) Casein 65, Caseinate 34,714 1,971 Protein Products (Ch.35) Total 100,089 2,419 TOTAL 223, ,269 (1) Includes wholemilk powder imported as chocolate block Page 28 of 31
29 Let s put it in terms of protein Net Trade = Imports - Exports Page 29 of 31
30 Net Trade Protein Basis For milk and protein products (Chapter 4: Harmonized Tariff Schedule), US is a net exporter. For whey products (Chapter 4 & 35:Harmonized Tariff Schedule), US is a net exporter. For casein and caseinate (Chapter 35: Harmonized Tariff Schedule), US is a net importer. Page 30 of 31
31 Net Trade and MPC Yes, the US is a net importer of casein and caseinate. But casein and caseinate imports have been static for more than 6 years Casein is old separation technology. The future opportunities are for membrane technology UF concentrates and UF powder (Milk Protein Concentrate) Portales is positioned to capture this MPC growth Page 31 of 31
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