I grew up in Franksville, Wisconsin. Back then, Wisconsin was a state full of dairy farmers. When I was a young girl, I remember riding in the backseat of the car on those long, desolate roads and counting the many dairy cows.
Fast forward to today, and the landscape in dairy-producing states looks much different. Over 338 dairy farms have closed in Wisconsin. As dairy farmers try to cope with an industry that is changing quickly, I’d like to suggest an innovative way for dairy farmers to create a new revenue stream. Let’s talk about how converting your cheese whey into dollars can help.
The number of dairy farms in America has dropped 94% since 1970. There was a time when our country was home to over 640,000 dairy farms. Today, there are about 40,000 – and that number continues to decline (source).
Last year, the Washington Post published an article titled, Dairy farming is dying. After 40 years, I’m done. It highlights how the dairy farming crisis is affecting families across the country. This is how the emotional article begins:
After 40 years of dairy farming, I sold my herd of cows this summer. The herd had been in my family since 1904; I know all 45 cows by name. I couldn’t find anyone who wanted to take over our farm – who would? Dairy farming is little more than hard work and possible economic suicide.
Dairies today are struggling to make even 2% profit on their milk sales. It’s imperative that dairy farmers focus on reducing costs and finding new, profitable income streams now. Monetizing cheese whey is a good place to start.
For this article, I interviewed Randy Mayley, a Senior Process Engineer at InterTech. Hearing Randy’s compelling story was an aha moment for me. In the past, cheese whey has been considered a useless by-product of the cheese making process. InterTech and Randy Mayley are on a mission to change that perception and help dairy farmers everywhere.
In this interview, Randy talks about his background, the methodology behind these revenue-generating ideas, and most importantly, where the money comes from to get started.
Diana Adams: Hi Randy. Tell me a little about your background. How did you get into the business of monetizing cheese whey and helping dairy farmers?
Randy Mayley: Thank you for interviewing me today. Small and medium size dairies are in a crisis right now. With declining profits and competition from large corporations, it is exciting that we can offer an option that can bring in significant income for them.
I’ve been a Process Engineer for over 40 years. I started college at sixteen-years-old (the youngest kid at my school). On the first day in one of my engineering classes, the professor asked me, “What is an engineer?”
It was a deer-in-the-headlights moment for me. I didn’t know how to answer that question back then. He explained that an engineer is someone who can listen and understand the issue at hand, develop a solution and then implement it.
That’s what I’ve done my whole life, and I’ve enjoyed it. It’s been very rewarding, whether it’s dairy or fuels or whatever.
Diana Adams: How did you and your team come up with this idea? Showing dairy farmers how to monetize cheese whey waste is brilliant. There must be a good story for how this came about.
Randy Mayley: This particular idea started to grow in 2014 when a representative from the Kingdom of Morocco contacted us because they were having a serious environmental problem with cheese whey’s high COD/BOD content pollution. Cheese whey is the liquid waste leftover from the cheese manufacturing process.
They recognized the serious problem with that waste polluting groundwater. It was causing pond algae blooms and other environmental issues. They came to us and asked:
What can we do with this cheese whey waste? Can it be turned into an income stream?
Diana Adams: That was very forward-thinking of them. Had you thought about how to do that before they contacted you?
Randy Mayley: I knew about experiments in New Zealand 30 or 40 years ago where they tried to convert it into value-added products. However, the technology didn’t exist back then to exploit all the income stream possibilities, so the two plants they built failed.
Since then, there have been many improvements – including the yeast that?s available for fermentation, and the filtrations methods.
Cheese whey is only 5% – 7% solids, the rest is water. That’s an awful lot of water to deal with. Creative engineering is necessary to develop value-added products from the cheese whey, and to determine what to do with the leftover water.
Diana Adams: What do you do to the cheese whey stream to make it a raw material for other products?
Randy Mayley: First, we separate the proteins out of the cheese whey stream for making high protein, zero lactose, zero sugar diabetic drinks for seniors. A significant advantage our process has is that the drinks taste natural without the sweet aftertaste enzymatic lactose treatment causes.
Market research confirmed that there is a tremendous open market for this type of product right now. So far, no one I’m aware of in the USA has been forward-thinking enough to develop this product line. 40% of the people in our country are lactose intolerant.
Diana Adams: So you can use the protein from the cheese whey stream to make diabetic drinks? That’s genius!
Randy Mayley: Yes, but the difficulty with concentrating the proteins is separating the lactose. Remember that 40% of people in this country can’t tolerate lactose, and many object to the sweet taste other lactose-free products contain. In order to make their drinks lactose-free, they enzymatically treat the lactose. These enzymes turn the lactose into digestible sugar.
Diana Adams: How do you take care of that sweetness problem?
Randy Mayley: It has taken copious research and development throughout the years. [Laughs] We realized that if we separate the lactose from the protein with our novel system, we can eliminate the sweet aftertaste many consumers find objectionable.
The process of separating lactose also removes necessary minerals, which must be returned so it tastes like natural milk. The end product tastes good. It basically tastes like the milk you’d drink at home, but without the downsides and with the extra healthy minerals. Plus, each one of our drinks has 20 to 30 grams of protein, or higher if desired.
Dairies have struggled with methods to separate the lactose from the proteins in a manner which produces good and natural tasting milk products. It took a lot of juggling, but we have a system that works well now.
Diana Adams: What do you do with the sugar component that you pull out? Where does that go?
Randy Mayley: We actually thought about that a lot. We realized we are dealing with a sanitary environment already (dairies have to be incredibly sanitary). Why not convert those sugars into food and/or pharmaceutical grade ethanol?
Diana Adams: What a great idea!
Randy Mayley: This ethanol can be used for food grade applications like CBD oil processing and pharmaceuticals, cosmetics, or even turned into fuel grade ethanol – but food grade ethanol has the highest selling price.
Diana Adams: What are dairy farmers currently doing with their cheese whey if they aren’t making a product with it?
Randy Mayley: If they don’t make a product with their whey waste, they are throwing it away. Some dairy farmers spray it over open agricultural fields. Some use it for other things, like washing down their milking stations. Some cheese plants even concentrate or dry the whey and sell it as a low-grade animal feed supplement. In all of these options, there’s a tremendous missed opportunity for valuable income.
Keep in mind, this whey solution is high COD/BOD (chemical oxygen demand and biological oxygen demand), so it has a negative effect on the environment. It’s not good to put that in ponds or on land because it creates significant environmental issues.
As a matter of fact, discarding cheese whey by dumping it onto land is banned by water discharge regulations in the United States. You are very limited on how much COD/BOD you can have in the water you send to the wastewater treatment plant because they don’t want to have an algae bloom.
One dairy group confidentially told me that each of their facilities pays over $900,000 per year to have it carried away. This volume of cheese whey could generate many times that in profits with a short return investment period.
Besides… There’s a lot of nutrition in whey!
Diana Adams: Really? I had no idea. Tell me more about the nutrition in whey protein and why it’s helpful.
Randy Mayley: The use of whey protein as a source of amino acids and its effect on reducing the risks of conditions such as heart disease, cancer and diabetes has been the focus of ongoing research for over a decade.
This research shows that proteins high in essential amino acids (EAA), branched chain amino acids (BCAA), and particularly leucine (Leu) are associated with increased muscle protein synthesis, weight loss, body fat loss, and decreased plasma insulin and triglyceride profile.
Whey is an abundant source of branched-chain amino acids (BCAAs), which are used to stimulate protein synthesis. When leucine is ingested in high amounts, such as with whey protein supplementation, there is greater stimulation of protein synthesis, which may speed recovery and adaptation to stress on muscles (ie. during exercise). Whey has approximately three grams of leucine per serving and the threshold for optimal protein synthesis is three grams.
Whey protein is popular among athletes because of its ability to be digested rapidly and help return the post-workout body back from a catabolic (muscle-wasting) state to an anabolic (muscle-building) state.
Whey protein isolates are also widely used in infant formula to provide a natural source of amino acids for optimal growth and development, as well as for protein fortification bars, beverages, dairy products, snacks, cereals and other food products.
If you’d like to read more about this research, these articles might be helpful:
- U.S. National Library of Medicine
- Clinical Nutrition Journal
- The American Journal of Clinical Nutrition
- Whey Processing, Functionality and Health Benefits
Diana Adams: If dairy farmers decide they want to monetize their cheese whey, what role do you and InterTech play?
Randy Mayley: We will develop processes to convert their low-value cheese whey waste streams into multiple high-value renewable products, yielding attractive returns for the dairy and investors. We also create jobs and support sustainable economic growth through the construction and operation of these plants. We do this all while being respectful of the environment.
We are always thinking about the future. There are a lot of options for dairies. The idea is to not have anything go downstream. Almost nothing goes into the waste stream. The dairy should see almost zero discharged from it.
Diana Adams: Can you get nitty-gritty about what this means exactly?
Randy Mayley: Well, we develop the actual Waste Conversion System. We also provide overall program management, engineering, procurement, construction and training. We can even help with the financing part and investor due diligence.
We also formulate the nutritional drinks that will give our dairy customers a competitive advantage in the “dairy-made-nutritional drinks” niche.
Diana Adams: I wish all dairy farmers knew about this. What about the cost associated with this process? How do you address that?
Randy Mayley: As I mentioned, we help with the necessary investor due diligence. Our investment model guarantees a “neutral” investment / risk / return platform for all partners on an “equal basis.”
This business model is not normally seen in the dairy industry, but it is starting to gain traction with milk margin declines and the rising cost of capital. As such, all partners evenly split roles and responsibilities, unit ownership, risk, and quarterly net-net disbursements, all, on an “even” basis.
This way, every venture partner has an even stake and responsibility in reducing time / cost / risk-to-market while maximizing returns for all unit holders. We are seeing ROI in less than two years, and it could be less depending on how the system is built. There’s a tremendous increase in profit for dairy farmers.
There’s plenty of fat on this cow for everyone.
Diana Adams: Thank you, Randy. Thank you for helping dairy farmers, thank you for being kind to the environment, and thank you for making such a valuable contribution to the world. You are truly making a difference for a lot of people. It’s a win-win for everyone involved.
As I mentioned at the beginning of this article, I grew up in Wisconsin. My memories of all those dairy farms is forever impacted by the short time I spent with Randy Mayley. I hope dairy farmers are inspired enough to pick up the phone and call him to continue this conversation. Thank you.
For over 35 years, InterTech has helped hundreds of food and beverage plants implement a variety of manufacturing projects. Whether it be a single line or multi-plant roll out, we have helped reduce their operating costs by $2-10 million per year.
Let us model your operations and show you the feasibility of your project ideas. The earlier we get involved, the more money we can help you save.
For multi-plant clients, we have helped develop long-term plans to capitalize on the savings of initial projects in order to support future projects whose returns are lower.
We also develop Requests for Information (RFIs) or Requests for Proposals (RFPs) for major equipment so our clients can be assured they are getting the correct equipment at the best value. By assembling all of the information we receive into a Total Cost of Ownership, we can forecast operational costs for the long-term and establish budgets for plants that have not previously been self-manufacturing their bottles.
Our clients include Cargill, AAK, Constellation, Ghirardelli, and both Coca Cola and Pepsi Cola (and their respective bottlers) and many others. We invite you to view a more complete list of our esteemed past and current clients.
Working with InterTech’s experienced engineering staff will help you make informed decisions and avoid costly changes.
120 Interstate North Parkway SE
Atlanta, GA 30339
(Randy Mayley can be reached directly at 770-635-5512)