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Spreadsheet Helps Calculate the Cost of Pasteurizing Milk for Calves

Posted: June 11, 2008

A new tool designed to help evaluate the decision to feed pasteurized waste milk is available. This spreadsheet developed by Penn State and Virginia Tech extension educators calculates the cost of owning and operating a calf milk pasteurizer as well as costs to feed milk replacer or whole, saleable milk.

A new tool designed to help evaluate the decision to feed pasteurized waste milk is available. This spreadsheet developed by Penn State and Virginia Tech extension educators calculates the cost of owning and operating a calf milk pasteurizer as well as costs to feed milk replacer or whole, saleable milk. The spreadsheet also compares the nutrients provided by milk replacer, waste milk, and whole milk. All nutrient values can be edited to compare a variety of feeding programs.

The spreadsheet calculates costs and nutrients fed, but does not evaluate calf health or growth for each option, because many variables other than nutrient intake affect the actual growth and health performance of calves. Additionally, the spreadsheet offers tables that compare the costs of alternatives to feeding pasteurized milk when the supply of waste milk is not adequate to feed all calves. The final components of the spreadsheet are two simple calculators that estimate the supply of and demand for waste milk and calculate the amount of powder to add to waste milk to increase solids or volume. This spreadsheet can be used when planning for a new pasteurizer and for managing systems already in place.

To download your copy of the Calf Milk Pasteurization Evaluator Spreadsheet, visit das.psu.edu/dairynutrition/calves. A manual with complete instructions and background information is available at the same location.

This spreadsheet was designed for you to use your own farm data and specifics related to the feeding system changes that you are proposing. To provide an understanding of what the spreadsheet can do for you, we have put together some examples of some typical situations. Table 1 shows some of the key inputs for two situations. Example 1 is an HTST system that recycles 66% of the heat generated and is shown for an operation with approximately 750 cows. Example 2 is a batch system that can process up to 30 gal/batch and is shown for a farm of about 200 cows. . In both examples, calves will be fed 1 gal/day of pasteurized waste milk, which contains 3.2% true protein and 3.9% fat and is assigned a value of $3/cwt. This will be compared in our examples to milk replacer containing 20% protein and 20% fat fed at 1.25 lb/calf each day, which costs $75 for a 50-lb bag. In Example 1 an electric mixer is used for milk replacer; Example 2 uses hand-mixed milk replacer due to the smaller number of calves fed. Whole milk in both examples is worth $19.40/cwt, contains 3.0% true protein and 3.5% fat, and would be fed to calves at 1 gal/day.

Table 2 shows the spreadsheet output comparing the nutrients and feed costs of the three feeds in these examples. On a dry matter basis, the waste milk provides more protein and fat than the other options, which would probably result in better growth in calves fed waste milk. A high protein, low fat milk replacer would be more similar to waste milk in the amount of nutrients fed to calves. It is beyond the scope of this spreadsheet to compare growth differences, so growth and health performance of calves are assumed to be equal for the economic comparison. The daily cost of each feed considers the cost on a dry matter basis and the amount of dry matter fed. These values are the same in our two examples. Waste milk is the cheapest of these feeds when its value is set at $3/cwt.

To download the spreadsheet, visit das.psu.edu/dairynutrition/calves. A manual with complete instructions and background information is available at the same location.

Considering the cost of pasteurizing milk is the next step. The spreadsheet calculates the cost of owning the equipment (an annual cost that spreads the cost over the life of the machine and considers the amount of interest that could be earned if the money was not tied up in the equipment). The pasteurizer also has operating expenses, including energy costs, cleaning, and extra labor to run the system.

In Example 1, owning and operating the HTST machine adds about $1 per calf to the feed cost (the total cost per day is about $46). Mixing the milk replacer adds $0.18 per calf. So the total daily cost for the 44 calves fed pasteurized waste milk is $1.25 per calf. For the remaining 6 calves, feeding milk replacer would cost $2.06 per calf; feeding whole milk would cost $2.60 per calf (the spreadsheet assumes that whole milk is pasteurized). Looking at this another way (Table 3), the total daily feed cost if all 50 calves were fed milk replacer would be $95.42. If we fed all 50 calves pasteurized waste milk, the total daily feed cost would be $59.32. Thus, feeding pasteurized milk would save the farm $36.10 per day. However, we don't expect to have enough waste milk to feed all 50 calves. This expectation is based on the spreadsheet's waste milk supply estimator and assumes typical waste milk volumes found in university field studies. The cost of feeding 44 calves pasteurized waste milk and 6 calves milk replacer is $67.25, which still saves $28.16 per day compared to feeding milk replacer to all calves.

In Example 2, the batch pasteurizer adds $1.55 to $1.70 per calf to the feed cost. The reason for this large increase is the small number of calves being fed on this smaller farm. The total daily cost of the batch pasteurizer is under $25, but that is only spread out over 13 or 15 calves. Hot water used to mix the milk replacer adds $0.01 per calf. So, in this scenario, the total daily cost for the 13 calves fed pasteurized waste milk is $1.95 per calf. For the remaining 2 calves, feeding milk replacer would cost $1.89 per calf; feeding whole milk would cost $3.22 per calf. As shown in Table 4, the total daily feed cost if all 15 calves were fed milk replacer would be $28.32. If we fed all 15 calves pasteurized waste milk, the total daily feed cost would be $27.14. So in this case, feeding pasteurized milk would save the farm $1.18 per day. But again, we don't expect to have enough milk to feed all 15 calves. The cost of feeding 13 calves pasteurized waste milk and 2 calves milk replacer is $29.19, which costs $0.87 per day more than feeding milk replacer to all calves.

Keep in mind that changes in the number of calves and the supply of waste milk can modify your interpretation of the cost calculation. For instance, the farm in Example 2 may decide that seasonal fluctuations in the number of calves on milk would allow them to more easily justify this purchase.

Making a management change to using a pasteurizer is a complex decision that requires several coordinated changes on the farm. Using a spreadsheet such as this can help you make more informed decisions and may prompt you to think more carefully about what system is best for you.

Table 1. Key Items from the Spreadsheet Input
This is a summary of the detailed input considered in the spreadsheet calculations


Example 1 Example 2
Pasteurizer type HTST Batch
Purchase price and installation cost $20,000 $7,350
Capacity 600 gal/h 30 gal in 45 min
Energy source Natural gas Electricity
Energy cost $1.25 per 100 cubic feet $0.11/kwh
Extra labor 1 hour@ $8/h 1 hour @ $8/h
Times used per day 2 2
Total calves on milk each day 50 15
Calves fed pasteurized waste milk 44 13

Table 2. Nutrition and Feed Cost Comparison of Liquid Feed Options


MILK REPLACER WASTE MILK WHOLE MILK
Crude protein, %dry matter 20.6 26.1 25.5
Fat, %dry matter 20.6 30.0 28.0
Cost per lb of dry matter $1.55 $0.23 $1.55
Dry matter fed, lb/day 1.21 1.12 1.08
Crude protein fed, lb/d (DM) 0.25 0.29 0.27
Fat fed, lb/d (DM) 0.25 0.34 0.30
Daily feed cost, $/calf (DM) $1.88 $0.26 $1.6

Table 3. Comparison of Various Feeding Systems, Example 1 HTST Pasteurizer

Feeding system Total cost $/day Savings or loss compared to feeding all calves milk replacer
All milk replacer $95.42
All pasteurized waste milk $59.32 $36.10
Pasteurized waste milk and some milk replacer $67.25 $28.16
Pasteurized waste milk and some whole milk $67.78 $27.64



Total of 50 calves; 44 fed waste milk, 6 fed an alternative feed

Table 4. Comparison of Various Feeding Systems, Example 2 Batch Pasteurizer

Feeding system Total cost $/day Savings or loss compared to feeding all calves milk replacer
All milk replacer $28.32
All pasteurized waste milk $27.14 $1.18
Pasteurized waste milk and some milk replacer $29.19 -$0.87
Pasteurized waste milk and some whole milk $29.96 -$1.64
Total of 15 calves; 13 fed waste milk, 2 fed an alternative feed

Coleen Jones, Research Associate and Jud Heinrichs, Professor of Dairy and Animal Science, Department of Dairy and Animal Science

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