Whey is the largest dairy by-product being disposed of for little or no value by SA cheese producers. However, the recent increase in prices of whey internationally must be prompting the managers of both large and small SA cheese plants to consider ways in which they could gain value from it.
Whereas prices for milk powder have merely doubled in the past few years, from about $2,800/t to around $4,500/t currently, prices of whey powder have multiplied 3-4 times.
There is no standard publication of whey prices (unlike powdered milk prices), but whey is currently selling at about $1,500/t; and lactose, which can be produced in the same process, at about $2,000/t.
Jerry Van Loon, senior product technology manager of GEA Process Engineering, Niro division, who is a world authority on whey processing, believes the recent extraordinary increase in whey prices is partly due to increased demand from China. He says: "When people are poor, they produce for their own survival; when they become slightly better off, they spend on their children; when they become affluent, they spend on pet food."
China is in the middle-income area and spending on baby food - which contains whey powder, whey protein concentrates (WPCs) and lactose - is rocketing.
All whey production plants in SA produce a basic whey product, which is used, for instance, as an ingredient in ice cream and yoghurts. All of these plants are associated with large (in SA terms) cheese factories.
The European cheese industry may provide an indication of future developments. About 40 years ago, European cheese factories set up whey production units primarily in order to get rid of whey. They were growing to such an extent that their whey production could not be simply fed to pigs. Typically, whey is produced in almost equal amounts to the litreage of milk processed in a cheese factory, so if one million litres is processed per day, the massive task of disposing of nearly one million litres of whey arises.
Says Van Loon: "There were simply not enough pigs for the European cheese factories."
Disposal of waste was thus their primary motivation. However, today the financial contribution from whey - and more sophisticated derivatives of it - is the primary impeller for European whey plants, he says.
Currently in SA, whey plants produce basic whey, but none of the sophisticated products which are produced by some whey plants in Europe and the US.
Says Van Loon: "We have to tell cheesemakers in SA that they have value products. It is a matter of changing mindset."
Nonetheless large-scale production of whey is still needed in order for a plant to be economic.
Van Loon estimates that a cheese plant processing one million litres of milk, and therefore producing nearly one million litres of whey per day would previously have been needed to make a whey powder plant economic.
But with the ''new economics'', a whey plant of a quarter of that capacity - 250,000 litres per day - could be economic, he says (if it is assumed there is no cost currently to disposing of liquid whey). That is still large, by SA standards.
But it is not only economics which is impelling large or medium cheese producers to think about extending their existing whey concentration or installing greenfields projects. It is that, like the European plants, there is no other way to dispose of whey, and waste disposal via municipal sewage systems is becoming increasingly expensive.
But with the current economics, the processing of whey can assist major dairies to make extra money to pay farmers more for their milk - thereby encouraging higher milk production to ward off the kind of shortage which is currently crippling the processing industry.
Small/medium cheese producers
This scenario seems to exclude small and medium-sized cheese producers. However they could also be considering some kind of concentration of whey in decentralised plants to make it more transportable - if, that is, they can find a market for their concentrated liquid whey at a larger whey powder plant of one of the major cheese companies.
They will also be impelled by tightening waste disposal legislation.
They could consider a reverse osmosis plant with membrane technology rather than the larger evaporator and spraydrying plants. However, a question they will need to answer is whether, if they deliver concentrated liquid whey, they will receive prices which reflect the higher world prices from the larger whey powder plants.
With the larger SA whey powder plants probably at full capacity currently, they might not pass on the higher price to smaller suppliers. However, they might be more inclined to do so if there was competition with other larger plants (as there is in many cases in Europe) for supplies from smaller producers - or if they come to have spare capacity and need more supplies of partially-concentrated liquid whey.