Dairy processing

The United States dairy processing sector is dynamic and adaptive to new changes in the market place. Changes in consumer preferences and manufacturing technologies are resulting in new challenges to the processing sector. Consumers want a wider array of quality dairy products. Fluid processors are adapting to changing consumer demands for beverage products by introducing new flavors, providing ultrapasteurization, and using creative packaging. In addition, United States food manufacturers are requesting dairy processors to provide new dairy fractions such as MPC for new nutrition products. United States dairy policy is attempting to adapt to these changes. Federal order reform has resulted in new market-oriented signals for dairy farmers to produce what the market wants; namely, quality milk components. US dairy farmers, however, also wants to maintain programs such as the DPSP that have had the unfortunate consequence of spurring demand for protein imports (i.e., MPCs, casein, and caseinates) and also resulted in a disincentive to produce these new innovative protein products here in the United States. Surplus skim milk solids are now moving into US Government warehouses rather than into commercial markets. The future of the United States dairy industry will clearly be toward producing innovative products that the market wants. There is a strong market for dairy products not only here in the United States but also overseas, which will mean learning to compete on a global scale. The challenge is to modernize our United States milk pricing programs to provide dairy farmers and processors proper price signals while providing a minimum level of support to dairy farmers. The benefit of a greater orientation toward the market place will be stronger rates of growth for United States-produced dairy products.