%

Category

QTY. Kgs.

Fat %

S.N.F.%

Rate/K.g. Rs..

Price Rs.

100

B.M.

100

6.5

8.84

13.65

1365

100

C.M

100

3.5

8.5

9.659999999

966

50/50

M.M

100

5

8.67

11.655

1165

Specified Rate for Buffalo Milk=Rs.210/Kg. Fat {Assumed Annual Average}

Or Rs. 13.65/Kg. For 6.50% Fat & 8.84% S.N.F. (29 C.L.R.)

Corresponding rate for Cow Milk 3.50% Fat & 8.50% S.N.F (30 C.L.R)

Rs. 9.659999999/Kg.say 9.66/Kg. For 3.50% Fat & 8.50 % S.N.F.{60:40Basis}

Rs.9.625/Kg @ B.M. Rates (Conventional Calculations 1/2x210 for Fat &1/3x210 for S.N.F.){Diff.=0.034999999}

Mixed Milk Composition: 5.00% Fat & 8.67% S.N.F. (29.50 C.L.R) {50% B.M.& 50 % C.M.)

COST OF STANDARDIZED MILK 4.50% Fat & 8.50% S.N.F. Prepared from 100% Buffalo Milk {60:40 Basis}

Qty.Kg

Fat Value Rs.

Fat%

S.N.F.%

S.N.F. Value Rs.

Quantity Kgs.

Rate Rs./Kg.

100

8.19

6.50%

8.84%

5.46

100

13.65

144.4

5.67

4.50%

8.50%

5.25

104

10.92

NET VALUE:Rs.10.92/Kg. or 11.26944/Liter say Rs.11.27/Liter

COST OF STANDARDIZED MILK 4.50% Fat & 8.50% S.N.F. Prepared from 100% COW MILK {60:40 Basis}

Qty.Kg.

Fat Value Rs.

Fat%

S.N.F.%

S.N.F. Value Rs.

Quantity Kgs.

Rate Rs./Kg.

100

5.795999999

3.50%

8.50%

3.864

100

9.66

128.6

7.452

4.50%

8.50%

3.864

100

11.31

NET VALUE: Rs.11.31x29/30=Rs.10.933/Kg or Rs.11.26944/Liter say Rs.11.27/Liter

COST OF STANDARDIZED MILK 4.50% Fat & 8.50% S.N.F. Prepared from 50% Buffalo Milk & 50% Cow Milk {60:40 Basis}

Qty.Kg.

Fat Value Rs.

Fat%

S.N.F.%

S.N.F. Value Rs.

Quantity Kgs.

Rate Rs./Kg.

100

6.993

5.00%

8.67%

4.648139999

100

11. 655

111.1

6.2937

4.50%

8.50%

4.556999999

102

10.85

NET VALUE: RS.10.850699999+(0.034999999+0.034999999)=Rs.10.920699997/Kg.

Or Rs.11.2701623969/Liter say Rs.11.27/Liters.

Total Handling Cost of Pasteurized Milk as assessed by a reputed business house in India:=Rs.3.16/Liter.

Let us assume Total Milk Handling Cost as Rs.4.00/Liter (Including unforeseen expenses/handling losses)

TOTAL COST OF PASTEURIZED MILK (6.50% Fat / 8.84% S.N.F.)=Rs.(13.65+4.00)=Rs.17.65/Kg. or Rs.18.21/Liter

TOTAL REVENUE FROM PASTEURIZED MILK (6.50% Fat & 8.84% S.N.F.)=Rs.23/Liter

NET PROFIT FROM PASTEURIZED MILK (6.50% Fat & 8.84% S.N.F.)=Rs.(23-18.2148)=Rs.4.7852/Liter {20.80% of turnover}

ANNUAL PROFITS FOR DAIRY PLANT HANDLING 1 L.L.P.D.=Rs.17,46,59,800

COST OF STANDARDIZED MILK Prepared from Buffalo Milk, Cow milk or Mixed Milk=Rs.11.27/Liter

TOTAL COST OF STANDARDIZED MILK(Sourced from B.M.,C.M. or M.M)= Rs.(11.27+4.00)=Rs.15.27/Liter

REVENUE FROM PASTEURIZED STANDARDIZED MILK=Rs.21.00/Liter

NET PROFIT FROM PASTEURIZED STANDARDIZED MILK=Rs.5.73/Liter {27.28% of turnover}

ANNUAL PROFITS FOR DAIRY PLANT HANDLING 1 L.L.P.D.=Rs.20,91,45,000

CONCLUSIONS:

• Dairy business in India is most profitable business among F.M.C.G (Over 20 to 30% net profits)
• Loss of Rs.2.00/Kg. to Rs.3.00./Kg. due to dilution and manipulation in raw milk is controllable.
• Water used for dilution is normally contaminated so it adversely affects quality of dairy products.
• Handling diluted/ manipulated raw milk is mainly responsible for hidden losses in dairy business.
• Pure raw milk without any dilution and manipulation is essential prerequisite for the organized sector to produce export quality dairy products strictly meeting with prescribed international quality standards.

Note: Arithmetical calculations relating to profitability of dairy business quoted herein are accurate, authentically verified and testified by professional experts associated with our organization.