29 May - 28 July, 2000


E-mail conference on
"Small Scale Milk Collection and Processing
in Developing Countries"

Discussion Paper 2.2: Milk Processing;
Other Milk Products








Pictures / Map

FAO-Dairy Page

FAO Home
Search FAO


Discussion Paper 2.2: Small Scale Milk Processing Technologies: Other Milk Products

By: T. B. Thapa, Dairy Consultant, Animal Production and Health Division, Food and Agriculture Organisation of the United Nations, Rome, Italy.


Dairying is part and parcel of integrated farming systems, wherein crops are cultivated and few cattle, goats, chickens are kept by the families for their livelihood. This is a typical example of a farming family in developing countries, wherein milk is a part of farm produce that generates cash income on a regular basis. For this reason, dairying has been recognised as an effective tool for rural poverty alleviation and sustainable livelihoods by governments of developing countries.  The reasons for this are simple and straightforward.  If farmers keep dairy animals, they have, besides milk, dung and urine as organic manure that improves the soil and increases crop productivity. Moreover, dairying promotes the integrated sustainable way of farming. The standard of living has improved in the milkshed areas where farmers have access to the market, for their milk produced on the farm.  In small holder operations, farmers are usually able to sell only morning milk; thus evening milk is consumed at home, improving family nutrition.



Milk processing started with the objective of converting perishable milk into concentrated and long shelf life dairy products like butter, cheese, ghee and so on.  Thus, the products could be easily transported to a market centre, and also fetch a better price or return.  In the present context, this discussion paper overviews the general scenario of processing technologies for milk product in a global context. A general review is made on the problems encountered by small scale processors, in respect of technology and cost effective equipment, market competition with the internal and externally traded products, quality regulations and government policy towards the promotion of small scale value-added processing.   The paper also takes a note of the present situation of the internationalisation of the market because of WTO agreements and its effect on small-scale production and marketing of locally produced dairy products.

The paper also discusses how the encountered problems could be overcome to sustain the small scale processing operations, and suggests the possible solutions.  The paper attempts to stimulate participation from all corners to dig out unpublished information on small-scale processing technologies. It is hoped that this paper will contribute to the conference objectives of sharing ideas and information about small-scale milk collection and processing, establishing links between people working in dairy development and defining priorities and policies for future activities would be achieved. This paper does not discuss liquid milk processing and marketing in developing countries. This topic has been covered in discussion paper


Variations have been observed in small-scale processing technologies used by entrepreneurs across agro-ecological zones. Market demand varies also between different ecological zones. Gradually, traditional technologies are in the process of upgrading to meet the market demand. Demand for safer and more hygienic products is increasing, due to increased consumer awareness. Mostly, small-scale technologies are traditional or semi-traditional, and their products have to compete with the large-scale manufacturers or multi-national giants. In developing countries, these small-scale processors do not have access to training, even if they are ready to pay for learning. Fellowships and external training generally go to the government organisations.  With few exceptions, most developing countries do not have dairy training facilities within the country. Small-scale processors are able to receive training only through donor assisted projects, if at all they operate in the areas.  Many entrepreneurs start small scale processing through learning by seeing, without formal skills, turning the enterprise into a risky business. This has been the case of small-scale dairy processors in many developing countries. 

Small-scale processors often find difficulties in getting the right kind of equipment for the business.  They do not have access to information, on types, capacities and prices of equipment and their cost competitive source of buying. 

The packaging used by processors is often not attractive. Many have to transport products to the major urban centres for marketing, and a rural producers finds difficulty bargaining with the urban marketers. This product has also to compete with the imported ones' in terms of quality and prices; multinationals are pushing their products in the developing countries. Could we have solutions to sustain the small-scale processors in the developing world? 

Many developing countries are currently in the process of joining or preparing to join the WTO. After this, better quality, better packed and competitively priced products would flood the market. The impact needs to be further assessed. 

Gradual movement towards a market type economy by the developing countries has exerted an adverse stress on the small-scale agribusiness including milk processing.   Do these countries want their small scale agribusiness to sustain or vanish or be replaced by the imported ones'?  If they want to safeguard, these countries should come up with a policy statement on what ways the small scale operations could be sustained, which have played a key role in rural poverty alleviation and rural employment generation. 


Small-scale processors produce a wide range of dairy products.  They are broadly categorised as fermented milk products, concentrated milk products, acid coagulated milk products, evaporated milk, fat-based milk products and dried milk products. The processes may vary slightly to significantly between the countries and regions depending on the taste, food habits and other considerations.

Fermented milks are the most common products from which other dairy products are also made.  In the earlier days, fermentation was used to control the growth of harmful bacteria and some pathogens while making indigenous milk products. The use of natural controlled fermentation is observed in 'Dahi' making in the Indian sub-continent, 'Laban' in Syria, 'Ergo' in Ethiopia and similar sour milk products in other regions.  These fermented milk products are used as the base material for making butter, ghee and soft or hard types of traditional cheeses even in semi-commercial operations.

On the Indian sub-continent, organic acids are used to coagulate milk; the resulting product 'Chhanna - a soft cheese type product' is used in sweets making.  In Latin American Countries, cheese making is an important sector of dairy industry; traditional cheeses based on rennet coagulation are made in small-scale farms and modern factories. 

Heat is widely used to concentrate and preserve milk, and such concentrated milk products are used in making sweets in the Indian sub-continent and Latin America.

Each category of products is briefly discussed below:


Fermented milks are products prepared by controlled fermentation of milk to produce acidity and flavour to a desired level.  The popular products are Yoghurt, Dahi, Acidophilus milk, Laban, Ergo, cultured buttermilk, kefir, Koumiss; beverages based on bulagaricus or bifidus strains, and so on. Fermented milks are very popular throughout the world. Yoghurt is one of the most popular brands of fermented milk, and originated centuries ago in Bulgaria. It is now produced and consumed in most parts of the world. Although the consistency, flavour and aroma may vary from one region to another, the basic ingredients and manufacturing are essentially consistent. Yoghurt is made from milk of various animals, but in most cases cow and buffalo milk are used.  To make a good quality product, raw milk used must be of low bacterial count, free from antibiotics, sanitising chemicals, mastitis milk and colostrum.  The milk also should be free from contamination by bacteriophages. 

For yoghurt manufacturing, milk is clarified and separated into cream and skim milk, then standardised to achieve the desired fat content.  Then, milk is heated to 85 C/30 minutes or 95 C/10 minutes. This higher temperature heat treatment is necessary to produce a relatively sterile and conducive environment for the starter culture; and to denature and coagulate whey proteins to enhance the viscosity and texture of the final product.  The mix may then be homogenised using high pressure, to thoroughly mix and prevent creaming and wheying off during incubation and subsequent storage, if facilities exist.  Then, the mix is cooled to inoculation temperature, and the starter is added (Str. thermophilus : Lactobacillus bulgaricus 1:1), and mixed well.  The inoculated milk is either retail packed or set in bulk at 43-45 C for 4-6 hours.  The packaging before or after setting depends upon whether the product is stirred type or set type.  The product is immediately cooled after setting to 5 C to slow down the physical, chemical and microbiological degradation. 

These days, one can see lots of diversification in yoghurt production, there are varieties namely set types, stirred or drinking types, flavoured and so on. The ingredients  used in making yoghurt includes whole milk, skim milk, cream, starter cultures, sweeteners, natural fruit and synthetic flavours. 

Cultured Buttermilk was originally the fermented by-product of butter industry, but today it is more common to produce cultured buttermilks from skim or whole milk.  S. lactis and S. cremoris are the commonly used starter cultures in the preparation of cultured buttermilk. Milk is usually heated to 95 C and cooled to 20-25 C before the addition of starter culture. Starter is added at 1-2% and incubated for 16-20 hours, resulting in an acidity of 0.9% lactic acid. The product is packed and sold in retail packs.

Sour cream is commonly called cultured cream, and the fat content ranges between 12-30% depending on the required properties. The starter is similar to the one used for cultured buttermilk.  The cream after standardisation to a desired fat content is usually heated to 75-80 C, and then homogenised to improve the texture. Inoculation and fermentation conditions are similar to those of cultured buttermilk, but with relatively shorter incubation time (lower acidity level of 0.6% lactic acid).

Acidophilus milk is a traditional milk product fermented with Lactobacillus acidophilus, and may be prepared using whole or skimmed milk depending on the market demand. The product is well known and recognised for its therapeutic benefits in the gastro-intestinal tract. The milk is heated to high temperature like 95 C for 1 hour or similar temperature-time combinations, basically to reduce the microbial load and also to favour the slow growing starter bacteria. Milk is inoculated at 2-5% level and incubated at 37 C until it coagulated. Some milk has acidity as high as 1% lactic acid, but for therapeutic purposes, the acidity range of 0.6-0.7% is more common.  The acidophilus milk may be sweetened, if demanded by the market. 

There are great many others Fermented Milk Products, like Kefir, Koumiss, Bulgarian milks, and others.  Many of these have developed in regional areas and, depending on the cultures used. These fermented milks have varying flavours, textures including the by-products of fermentation such as gas or ethanol or both. 


Fat based milk products like cream, butter, ghee, and ice cream are also described as fat rich milk products.  These products are made after stepwise concentration of fat from whole milk to cream, and cream to butter and then to ghee. Milk is separated to concentrate fat in the form of cream (around 40% fat), and cream is churned for further concentration to butter (around 80% fat).  This butter when heated to 110 C yields Ghee or clarified butterfat (>99.5% fat), which is totally a milk fat.

Butter is usually made from sweet cream and is salted. However, it can also be made from cultured cream, but could be unsalted if it has to be used in other formulations like recombination and so on.  The principal  constituents of a normal salted butter are fat (80 - 82%), water (15.6 - 17.6%), salt (about 1.2%) as well as protein, calcium and phosphorous (about 1.2%). Butter also contains fat-soluble vitamins A, D and E. The ingredients  used in making butter includes cream, with or without starter cultures, with or without butter colours like annatto,  with or without table salt. 

Ghee or clarified butterfat is also described as anhydrous milk fat. These names are alternatively used in different parts of the world.  Ghee is made either from butter or directly from cream.  The product is very popular around the world, and especially in the developing countries.  The product is very important from a nutritional, religious and commercial point of view.  The name itself signifies that it is produced after clarification of butter, and is a product with a long shelflife. Butter or cream are the sole ingredients used in making ghee. 

Ice cream has a long history as a popular dairy food item. It has evolved from a manually manufactured household product to a fairly automated industrial product.  Ice cream is one of the best forms of diversification in processing and value-addition in milk, with a high profit margin.  The basic steps to be followed to manufacture ice cream are selection of the ingredients and their blending, pasteurisation, homogenisation, ageing the mix, freezing, packaging and hardening. Ice cream should have greater than 10% milkfat by legal definition, and usually between 10% and as high as 16% fat in some premium ice creams, 9 to 12% milk solids-not-fat, and this component is also known as the serum solids which contains proteins (casein and whey proteins) and carbohydrates (lactose) found in milk.  Ice cream should contain 12 to 16% sweeteners and 0.2 to 0.5% stabilisers and emulsifiers.   Varieties of food grade colours and flavours are used depending upon the taste of consumers, but Vanilla is often the most preferred. 


Cheese making started as a way of preserving milk, to a long life product. In a simple definition, cheese is the fresh or ripened product obtained after coagulation and whey separation of milk, cream or partly skimmed milk, buttermilk or a mixture of these products. Principally, cheese making involves concentration, preservation and ripening. Milk is pasteurised and cooled to inoculation and setting temperature, additives like saltpetre or salt or annatto colour are added, starter culture is inoculated, the milk is coagulated using rennet, the curd is cooked, pressed, and salted, and the cheese is ripened. These three processes are common for all cheese varieties.  By controlling these processes in different ways - more or less whey drainage, stronger or weaker acidification, different moulding, different surface treatment, addition of different micro-organisms, storage at different temperatures, etc. - it is possible to manufacture a large number of very different cheese varieties from the same raw material: milk. Broadly, cheeses are classified as soft, semi-hard, hard, and very hard types. The ingredients  used in making cheese includes whole milk, skim milk, cream or a combination of  two of them, starter cultures, rennet or organic acids like citric acid. Spices like pepper, cumin, black peppers and other may optionally be added in processed and special types of cheeses. 

Soft cheeses are the cheeses with high moisture content.  The popular cheeses in this category are Cottage Cheeses, Mozzarella, Paneer, Chhanna and so on.  Soft cheeses could have moisture content as high as 80 %. Among the soft cheeses, mozzarella, paneer and chhanna are of great importance to the developing countries. 

Thousands of varieties of cheeses have evolved that are characteristic of various regions of the world. They are Fresh, unpinned cheeses (Cottage, Cream and Ricotta), Bland and buttery (Edam, Gouda type), Swiss-style cheeses (Emmentaler, Gruyere), Yak Cheese (typical Nepalese hard cheese), Cheddar-style cheeses, Extra-hard cheeses (Parmesan, Saanen), Monastery cheeses (Saint Paulin), Blue- veined Cheeses (Roquefort, Stilton and Gorgonzola), Camembert and Brie types, Goat's milk cheeses, Ewe's milk cheeses (Feta), Spiced or flavoured cheeses, Smoked cheeses, Whey cheeses (Ricotta), Strong-smelling cheeses (Limburger, Maroilles), and Processed cheeses. 


Evaporated milks, sweetened condensed milk, condensed buttermilk, condensed whey, Khoa and Kurauni are classified under the category of concentrated milk products. The ingredients  used in making concentrated milk includes whole milk or skim milk or cream or a combination of to standardise to  a desired level of composition.  Sweeteners are added in sweetened product like sweetened condensed milk, and stabilisers may also be used. 

Evaporated milk
After the raw milk is clarified and standardised, it is given a pre-heating treatment of 93-100 C for 10 to 25 min or 115-128 C for 1 to 6 min. Basically, pre-heat treatment is given to increase the concentrated milk stability during sterilisation, to decrease the chance of coagulation taking place during storage, to decrease the initial microbial load, and to modify the viscosity of the final product. Milk is then concentrated at low temperatures by vacuum evaporation. This process is based on the physical law that the boiling point of a liquid is lowered when the liquid is exposed to a pressure below atmospheric pressure. In this case, the boiling point is lowered to approximately 40-45 C. This results in little to no cooked flavour. The milk is concentrated to a 30-40% total solids level. 

Sweetened Condensed Milk
In this product, sugar is used to increase the shelf life of condensed milk. Sucrose, in the form of crystals or solution, increases the osmotic pressure of the liquid. This in turn prevents the growth of micro-organisms. Milk is heated to 85-90 C for several seconds after it has been clarified and standardised. This treatment destroys osmophilic and thermophilic micro-organisms, inactivating lipases and proteases, decreases fat separation and inhibits oxidative changes. This product is similar to the evaporated milk, with added sugar in it.  Although sugar may be added before evaporation, post evaporation addition is recommended to avoid undesirable  viscosity changes during storage. Sugar is added for a final concentration of not less than 45%.

Condensed Buttermilk and Condensed Whey
These products are made to utilise the by-products from butter and cheese industry.  Many times, buttermilk and whey are mixed with the skimmed milk during skimmed milk powder manufacturing. 

Traditionally, heat is used to concentrate and preserve milk.  Khoa or Kurauni is also prepared by concentration of milk to a semi-solid consistency, and is used as base material while making milk based sweets in the Indian sub-continent and Latin America region. The ingredients  used in making Khoa or Kurauni is pure whole milk, preferably buffalo milk. 


Milk powders, whey powder and buttermilk powders are described as dried milk products. Traditional products like Chhurpi and Dukhoa from the Indo-china region also fall under the category of dried milks. The ingredients used in making dried milk products include condensed skim milk or condensed  whole milk, with or without added sweeteners , stabilisers, and vitamin concentrates. 

While making milk powders, milk is first clarified, standardised and then heat-treated.  This heat treatment is usually more severe than that required for pasteurisation. This heating destroys all the pathogenic and most of the spoilage micro-organisms, and also inactivates the enzyme lipase, which could cause lipolysis during storage. Milk is then evaporated prior to drying.  Spray drying is the most commonly used method for producing milk powders. After drying, the powder must be packaged in containers able to provide protection from moisture, air, light, etc.  Milk powders are broadly of two types; Whole milk powder and Skim Milk Powder.   For the retail consumer market, Instant milk powder are produced and packed. 

Chhurpi/Durukhoa is a traditional dried milk product from Indo-china region. It is the dried hard casein product produced from yak or chauri (crossbred yak Vs cattle) milk traditionally in the Himalayan region of China, India, Bhutan and Nepal. The product is widely consumed by Himalayan people as a source of nutrients, and is chewed to maintain salivation during mountain climbing. The product is known to have started with the aim of conserving the valuable yak milk into a longlife dairy product. These days, Chhurpi is made using buffalo, cow, yak milk, and the product could be made using milk from other species too.  Chhurpi is produced in the scattered remote areas, where there is no market for liquid milk, and where no other milk processing facilities exist. 

Whey Powder is a by-product of cheese industry, and disposal has been a serious problem.  Thus, whey is condensed and dried to use as additives in the food industries.  Whey Protein Concentrates are also prepared by ultrafiltration of whey. After ultrafiltration, the retentate is pasteurised, may be evaporated, and then dried.  Drying, usually spray drying, is done at lower temperatures than for milk in order that large amounts of protein denaturation may be avoided. 


The following have been identified as some of the key challenges currently faced by the small-scale milk processors in developing countries; 

  • No easy access to training and skill development
  • Trade barriers requiring policy interventions to promote development of national dairy industry within the context of WTO.
  • High value added local taxes on products, and duties on import of equipment and production inputs like rennet and starter culture. 
  • No easy access to the information on the dairy business (for example equipment, inputs availability,  markets, and so on).
  • Appropriate scale of technology is not available (either traditional or automated modern technology is available, but appropriate to the small-scale is not available. The entrepreneur has to invent by himself.)
  • Poorly developed Legal Quality Standards,  and Weak Quality monitoring and enforcement mechanism 

Despite these challenges, great many opportunities exist  for operating small-scale dairy enterprises in developing countries, and the important ones are listed below; 

  • Privatisation and government withdrawals from the parastals or large scale dairy industry is resulting in an increased market  freedom. Now, these avenues are the opportunities for the small-scale processors. 
  • Market opportunities for value-added milk products are growing due to the increasing trend of urbanisation. Small-scale enterprises can focus on specific tailor made products, using simple and low cost technology, and that generates higher returns. 
  • Small-scale enterprises could be family owned enterprises, thus the control on the business could be much easier and better.  These are good to generate sustainable self employment. 
  • Management could  be more simple and flexible.

Many developing countries are currently in the process of joining or preparing to join the WTO.  These countries need to develop policies to safeguard the small-scale processors, which are playing a key role in rural poverty alleviation and rural employment generation in these countries. This should facilitate and promote the initiation and development of a market driven small-scale processing sector. 


The sections on overview and constraints and the challenges and opportunities, have already highlighted the small-scale milk processing scenario in the developing countries.  A very small share of milk produced in these countries is being handled by the organised sector,  and  almost 80 percent is processed and handled through the traditional and informal channel. Also, in the light of the global trend of privatisation, small-scale enterprises are considered to be very important to the national economy, employment generation at the very local and rural level.  Farmers have a secured market for their milk production.  These enterprises are contributing to a real extent in reducing the rural-urban migration. It has been realised that they are very important, but many small-scale enterprises are struggling to survive.  The  Animal Production Service and Health Division in FAO realised this and decided to organise an e-mail conference on this topic. 

Thus the real agenda for future strategies must address the training and human resource need, trade barriers requiring policy interventions,  local taxes on products, and import duties on equipment, accessibility to the information on the market trend and appropriate technology,  legal requirement and standards and other relevant issues affecting the development of small-scale agribusiness. 

The participants from all over the world with a majority from developing countries are invited to share their experiences on the problems faced by the small holder dairy processors, and how best could the problems be solved. This would help to formulate common strategies, for promotion and further development. 


FAO (1990). The Technology of Traditional milk products making in developing countries.

Lambert, J.C.;  Dugdill, B.;  Draayer, J. &  Bennett, A. (2000). An Introductory  paper on "Overview of Small-Scale milk Collection and Processing in Developing Countries", Animal Production Services (AGAP), FAO, Rome, Italy. 

Thapa, T.B. (1994). Basics of Milk Processing, published by DESC/ATS Project, HMG-USAID Project, Nepal. 

Dairy Science and Technology, Education Series, University of Guelph, Canada,  Home Page: http://www.foodsci.uoguelph.ca/dairyedu/home.html 

Back to top

FAO, 2000