Economic and environmental analysis of processing plant interventions to reduce fluid milk waste

Abstract

With the increased awareness about the economic and environmental impact of food waste, many interventions along food supply chains have been proposed to mitigate food waste. Even though interventions used to target food waste usually revolve around logistics and operations management, we highlight a unique solution to address this issue, specifically for fluid milk. We target the intrinsic quality of fluid milk by evaluating interventions that will extend the product shelf life. We used data from a previous fluid milk spoilage simulation model, collected price and product information from retail stores, conducted an expert elicitation, and used hedonic price regressions to determine the private and social gains to the dairy processing plant when implementing 5 different interventions to extend shelf life. Our data suggest that the value of each additional day of shelf life is approximately $0.03 and indicate that increasing periodic equipment cleaning is the most cost-effective strategy for processing plants to achieve fluid milk shelf-life improvements, both from a firm's economic standpoint and from an environmental standpoint. Importantly, the approaches reported here will be valuable to help individual firms to generate customized facility and firm specific assessments that identify the most appropriate strategies for extending the shelf life of different dairy products.