The Economics of Skim Milk

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Do you ever wonder why skim milk is so highly advertised as "good for you?"

Consider this: Butter is a big selling, profitable item, so dairy producers (not the underpaid dairy farmer!) make lots of butter. Then, the question is what to do with the left-over "milk by-product" because it certainly isn't milk anymore? There's nothing left in it but water, a little protein and a small percentage of water soluble vitamins. For every pound of butter produced, there remains 26 liquid pounds of 'milk by-product' to do something with...

By definition, a 'by-product' is a secondary or incidental product deriving from a manufacturing process. A 'by-product' can be useful and marketable, or it can be considered waste.

If the cow was in your pasture, you might also have a pig, and use the 'milk by-product' to feed it because it still contains the protein. Not so in a factory. No pigs. A gallon of 'milk by-product' (skimmed milk) has a density of 8.637 pounds per US gallon. So, 26 pounds of 'milk by-product' is roughly 3 gallons. And it's perishable.

"Gee, what if we do a big advertising campaign and sell it as "good for you"? Heck, we could probably bottle it and sell it for the same price as milk!"