Farmers' preferences for adopting on-farm concentration of raw milk: Results from a discrete choice experiment in Germany

Abstract

ABSTRACT: Milk concentrates are used in the manufacturing of dairy products such as yogurt and cheese or are processed into milk powder. Processes for the nonthermal separation of water and valuable milk ingredients are becoming increasingly widespread at farm level. The technical barriers to using farm-manufactured milk concentrate in dairies are minimal, hence the suspicion that the practice of on-farm raw milk concentration is still fairly uncommon for economic reasons. This study, therefore, set out to investigate farmers' potential willingness to adopt a raw milk concentration plant. The empirical analysis was based on discrete choice experiments with 75 German dairy farmers to identify preferences and the possible adoption of on-farm raw milk concentration. The results showed that, in particular, farmers who deemed the current milk price to be insufficient viewed on-farm concentration using membrane technology as an option for diversifying their milk sales. We found no indication that adoption would be impeded by a lack of trustworthy information on milk processing technologies or capital.

Keywords

• discrete choice experiment
• on-farm raw milk concentration
• random parameter logit model
• latent class analysis