Is selling raw milk actually the least profitable part of a dairy business?
Was looking into small dairy businesses recently and one thing really stood out to me.
Most small dairy farmers focus on one thing: how many litres of milk the animals are producing.
But what happens to that milk afterwards might matter just as much.
The same milk can become Paneer, Curd, Ghee, Butter, Lassi, Flavoured milk and these products don’t all have the same margins or shelf life.
The interesting one for me is ghee.
Milk has to be sold quickly. If you don’t have a buyer, every extra day becomes a problem.
Ghee is completely different. It can be stored for months, transported much further and sold directly to customers in jars.
Paneer is another interesting one because restaurants, sweet shops and caterers need it regularly. Instead of finding hundreds of households to buy milk every morning, you could potentially have a few regular commercial buyers.
Obviously there’s another side to this. You need equipment, labour, packaging, food licences and most importantly customers. Turning milk into paneer doesn’t magically make it profitable.
But it does make me wonder whether someone starting a small dairy should even think of themselves as a milk producer.
Maybe the better business is keeping fewer animals and figuring out how to get more value out of every litre they produce.
Would be interested to hear from anyone actually running a dairy — what makes you more money per litre: selling milk directly or processing it into something else?