SIC 2026 Fluid Milk
SIC 2026
This industry encompasses establishments primarily engaged in processing fluid milk, cream, and related products that included cottage cheese, yogurt (except frozen), and other cultured milk products.
311511
Fluid Milk Manufacturing
The fluid milk industry is an important subsector of the nation's dairy business. Fluid milk producers are often huge, sophisticated, diversified operations with product lines crossing industry boundaries. They manufacture and market a mix of fluid milk products, cheeses, ice creams, butter, dairy ingredients, and sometimes extensive lines of nondairy products.
In 2004 there were more than 9 million milk cows on U.S. farms. They produced an average of 18.9 pounds of milk each, for a total of 170.5 million pounds of milk produced during the whole year. California had the highest milk production, followed by Wisconsin, New York, Pennsylvania, and Idaho.
The sale of milk in bulk containers for in-home use is a mature and stable business, but with little room for significant growth. However, the milk products industry is benefiting from the increased popularity of specialty milks and products in convenience packaging. With a penetration level nearing 98 percent in U.S. homes, milk is looking to compete with soft drinks for the huge "on-the-go" market.
The highly regionalized fluid milk industry started on the dairy farm—where the raw milk was produced—and extended out to processors and manufacturing plants owned by dairy farm cooperatives, general food processors, and even by supermarket chains marketing private label product lines. These processing plants made a variety of milk products destined for retail outlets, food service and institutional markets, and to a lesser degree, other countries. Milk is an extremely perishable commodity, and supply and demand can fluctuate unpredictably, depending on such variables as the output of individual cows, weather conditions, and even road conditions met by tank trucks.
In the 1990s changes in the dairy industry transformed the complex relationships between cooperatives and processors. Dairy cooperatives traditionally helped to reduce the impact of such fluctuations on milk handlers by more efficiently coordinating supply arrangements and routing raw milk supplies not needed for fluid milk. Dairy cooperatives assisting the producers in price setting have in many cases taken over all stages of dairy operations, including herd management and milking; management of fluid milk supplies and surpluses; development of competitive new products; fluid milk processing; and the manufacture and marketing of a broad range of dairy products and ingredients.
Government pricing regulations were another means of insuring market stability. The government regulated milk pricing to farmers through Federal Milk Marketing Orders authorized by the Agricultural Marketing Act of 1937 or the Agricultural Act of 1949, which established the ongoing dairy price support program for areas where producers had agreed to abide by it. Supervised regionally by the U.S. Department of Agriculture (USDA), prices were established geographically and according to the milk supply, fat content, weight, and the end use of the milk. From its inception, the support price fluctuated according to market conditions. In addition to the federal pricing structure, almost one-third of milk producing states also regulated milk pricing to farmers.
Cow milk is the principal source of America's fluid milk supply. It contains about 87 percent water and 13 percent solids, which are composed of solids-not-fat (SNF) and milk fat. Components of SNF are mostly protein (caseins and whey), lactose, and minerals important to human nutrition. An excellent source of calcium, phosphorous, and vitamins A and B-2, and a good source of vitamins B-1 and B-12, milk's nutritional components earned it the label of "most perfect food." It is, however, a poor source for iron, copper, manganese, nicotinic acid, and vitamins C and D. Since the 1920s most milk sold in the United States has been fortified with vitamin D.
Class I fluid milk meets strict standards, which include regular inspections of the herd and herd housing facilities, dairy equipment, and milk storage units to insure that they satisfy health and sanitation requirements. Class I milk is used for human consumption or in manufactured milk products. Milk of manufacturing grade does not meet such strict standards and is priced lower.
In most dairy operations, raw milk is piped from a milking machine to a refrigerated bulk storage tank before it is transferred to a tank truck for delivery to a plant. There it undergoes the following processing operations:
Separation: The milk is split into cream (fat) and skim milk. The cream is then added back to the milk stream to achieve the desired fat content.
Pasteurization: The milk is heated to destroy pathogenic bacteria and other undesirable organisms that might lead to spoilage. In continuous high-temperature-short-time pasteurization (HTST), milk is heated to 161 degrees Fahrenheit (72 degrees Celsius) for a minimum of 15 seconds. Since about 1970 ultrahigh temperature pasteurization (UHT), through which milk is heated at temperatures as high as 265 degrees Fahrenheit (130 degrees Celsius) for three seconds, has been used with products such as heavy and light cream and half-and-half. This process has extended shelf life for several months.
Homogenization: This process breaks up the fat globules in milk, forming a stable emulsion that does not separate. Most fluid milk is homogenized.
The following products are included in the fresh milk category: whole milk, lowfat milk, skim or nonfat milk, cream, half-and-half, and buttermilk.
Whole milk contains not less than 3.25 percent milkfat and 8.25 percent solids-not-fat (SNF). Vitamins A and D may be added at levels of at least 2,000 International Units (IU) per quart for vitamin A and 400 IU for vitamin D. Flavoring ingredients may also be added.
Lowfat milk contains milkfat at levels of 0.5, 1.5, or 2 percent, not less than 8.25 percent SNF, and at least 2,000 IU of vitamin A per quart. If vitamin D is added, it must be present at a level of 400 IU per quart. Flavoring ingredients are also permitted.
Skim or nonfat milk contains less than 0.5 percent milkfat and not less than 8.25 percent SNF. It must contain 2,000 IU of vitamin A per quart. If vitamin D is added, it must be present at a level of 400 IU per quart. Flavoring ingredients are permitted.
Cream is made by separating out most of the skim milk and is rich in milkfat. Light (coffee) cream contains at least 18 percent and no more than 30 percent milk fat. Heavy (whipping) cream contains at least 36 percent milkfat. Half-and-half, a mixture of milk and cream, contains between 10.5 percent and 18 percent milkfat. It was often preferred over coffee cream for its lower fat and calorie content, as well as its lower cost.
Buttermilk is a by-product of churning cream into butter. Similar in composition to skim milk, it is condensed and dried for commercial use in baking and packaged cake mixes; it is not sold for consumption.
For centuries, people have known how to preserve the nutritional values of fresh milk for weeks or months by using bacterial cultures. Lactic acid-producing bacteria and certain characterizing ingredients may be added to fresh milk products and, depending on the level of milkfat...
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