1. Why Raw Milk Must Be Sent to Factories Every Day
Milk that has just been squeezed at a farm is called raw milk. It is produced every day, spoils easily, and cannot be stored for long periods. Because of this, it is collected daily or every other day and processed into milk and dairy products at dairy factories on a daily basis [1]. Imagine a fish market in the morning. Fresh fish needs to be sold that same day, while dried fish can be kept for later. Raw milk is similar; the products that cannot wait are processed first. However, unlike fish, raw milk is produced continuously as long as there are cows, so the supply cannot be stopped. This "cannot stop" feature is its main characteristic. So, what is the specific order for processing the products that cannot wait?
2. Why Products With Shorter Shelf Lives Are Made First
The processing order is determined by prioritizing products with shorter shelf lives. The order is: 1) drinking milk, 2) fresh cream and cheese, and 3) skim milk powder and butter [2]. This is not a ranking fixed by law, but rather a priority for processing. In fiscal year 2016, the total raw milk production was about 7.35 million tons. About 4.06 million tons went to drinking milk, about 1.69 million tons to fresh cream and cheese, and about 1.55 million tons to skim milk powder and butter [3]. Dividing 4.06 by 7.35 shows that drinking milk accounts for about 55%. The other two categories each account for about 20% (the total does not reach 7.35 million tons because self-consumption is counted separately). If drinking milk makes up more than half of the production, what happens to butter when milk sales change?
3. Why Summer Milk Shortages Mean Transport From Hokkaido
Dairy cows are sensitive to heat, so raw milk production decreases in summer and increases in winter. On the other hand, consumption of drinking milk increases in summer and decreases in the cold winter [1]. The seasons of production and consumption are out of sync. During periods when milk is in short supply, local raw milk from Japan’s prefectures other than Hokkaido is not enough to meet drinking demand, so raw milk is transported from Hokkaido to fill the gap. After meeting drinking demand, Hokkaido produces skim milk powder and butter. In seasons like winter when drinking demand is low, surplus milk in various regions is turned into dairy products. Because dairy product factories are concentrated in certain regions, it is said that surplus drinking milk in the prefectures outside Hokkaido often results in raw milk that is difficult to process [1]. Where does the surplus raw milk go if it does not become drinking milk?
4. How Surplus Raw Milk Becomes Butter and Skim Milk Powder
When raw milk is in surplus, it is not thrown away. Instead, it is processed into products with long shelf lives, such as skim milk powder and butter. This also helps protect the income of dairy farmers. The national adjustment of milk supply and demand ultimately appears in the form of skim milk powder and butter [1]. Milk is difficult to preserve, and it is said that oversupply and sharp price drops can easily occur for various reasons. Furthermore, restructuring the dairy production system takes 3 to 5 years or more [4]. Therefore, an "escape route" is needed when there is a surplus of drinking milk. To make 200g of butter, about 4.2 to 4.4 liters of raw milk are needed. The raw milk is put through a centrifuge to separate cream (about 40% fat), then sterilized and cooled. After resting for 8 to 12 hours, it is churned into butter grains about the size of a soybean [5]. By the way, what remains after the cream is taken out?
5. Why Butter and Skim Milk Powder Are Made Together but Only One Has a Surplus
When butter is made, skim milk remains after the cream is removed, and this becomes the raw material for skim milk powder. In other words, butter production also creates the raw material for skim milk powder. However, the number of people who want butter is not the same as the number of people who want skim milk powder. According to government data, at current production levels, there was a situation where only skim milk powder inventory was piling up (as of fiscal year 2023) [1]. During the coronavirus pandemic, which started at the end of fiscal year 2019, more raw milk was directed toward butter and skim milk powder, which can be stored for a long time. In fiscal year 2021, butter production was 75,085 tons (a 5.8% increase from the previous year), and skim milk powder production was 159,710 tons (a 13.7% increase). Meanwhile, raw milk for drinking milk decreased by 0.9% [6]. Dairy products are also related to annual import rules. Since the 1993 GATT Uruguay Round agreement, there is an obligation to import skim milk powder and butter equivalent to 137,202 tons of raw milk every year [2]. What about the financial side of these adjustments?
6. Why Milk Prices Differ by Use Even for the Same Raw Milk
Current raw milk is sold through "use-based transactions," where the milk price is determined according to its use (such as for drinking milk or for skim milk powder and butter) [1]. For processed raw milk that competes with imported products, the milk price can sometimes fall below the production costs for dairy farmers. Because of this, the government pays a producer subsidy [1]. This was not always the case. Until the 1960s, milk for drinking and milk for dairy products were mixed into a single price for shipment to the dairy industry, and the industry chose the use. This made it hard to understand the price of drinking milk, and it became difficult to negotiate milk prices during times of surplus supply. From 1965 onward, the framework for use-based transactions was gradually established [4]. Thus, the order of "milk first, butter last" is supported financially as well.
7. How to Compare Storage Times of Dairy Products at Home
What you can do today: Compare the expiration dates of the milk cartons, fresh cream, butter, and powdered milk you have at home. You will see how much the storage period differs by product. What you can do when you go out: At the supermarket, compare how the shelves for milk, fresh cream, and butter look in summer versus winter. Official information: The Ministry of Agriculture, Forestry and Fisheries' "Situation Surrounding Raw Milk Supply and Demand" and J-Milk's supply and demand outlook materials contain charts and numbers, serving as an entry point for further research.