Bus 378Milk Processing Project

Team Cash Cow:Todd Martin, Jesse Dyer, Charlie May

Curtis Penney, Scott DeFriez

Todd Martin

Project Overview

Todd Martin

Goal: Generate a feasibility analysis that proposes the best way to process milk from UI's dairy herd.

Project summary: To research whether there is a more cost-effective way to process and provide milk to the U of I, while reducing the university’s carbon footprint.

Project Scope

Todd Martin

Identifying processing alternatives for raw milk produced by the UI dairy herd.

Performing feasibility analysis on alternatives

We were not responsible for implementing any of the proposed alternatives or contracting with potential business partners.

Sponsors

Todd Martin

Darin SaulSustainability Coordinator

University of Idaho

Tracie LeeAcademic Faculty

University of Idaho

Key Stakeholders

Todd Martin

Darin SaulTracie Lee

Project TeamUI Dairy

UI Dining Services (Sodexho)

Major Risks

Curtis Penney

Lack of information from key sources (inability to complete analysis)

Inability to find a local partner for milk pasteurizing

Inability get an inspector before deadline

 Scope Creep

Project Constraints

Curtis Penney

 Time (two months)  5 team members –

all with additional academic, work, and family responsibilities

Availability of needed information from key sources

Limited knowledge of the dairy industry

UI CampusDaily Milk Consumption

Curtis Penney

Location Gallons Consumed/YearDays Open/Academic

Year

6th Street Marketplace 1,536 192

Java Nook(admin) 384 160

Joes (Sub) 640 160

Law Coffee Shop 160 160

Bobs 17,920 224

Common Grounds 9,600 160

Common Cafeteria 480 192

Total Gallons 30,720

1,248 Average Cost Milk Consumed (per gallon) $ 2.80  

Total Cost of Gallons Consumed

$ (86,016.00)  

UI Dairy Daily Raw Milk Production-General Expenses

Jesse Dyer

Facilities Estimate

Remolding of Dairy (10x10 addition) $ (20,000)

Cool Storage $ (10,000)

Production Costs  

Yearly Labor (2 Workers for Production and Delivery) $ (62,400)

Packaging (5 Gallon Bags) $ (36,610)

Yearly Milk Production $ (270,598)

Licensing (Grad A Processing Licensing-Free)) $ -

Delivery Service  

Delivery Vehicle (Intial Cost) $ (30,000)

Delivery Costs(fuel, repairs, etc.) $ (7,800)

Total General Expenses $ (437,407)

Processing Options

Jesse Dyer

1. McDonald Option2. Shumway Option3. Refurbished Option4. WSU Creamery Option

McDonald Option

Scott DeFriez

Scott McDonald Option Estimate

Equipment $ (19,000.00)  

Repair and set up $ (21,700.00)  

Transportation to U of I $ (400.00)  

Total Intial Expense $ (41,100.00)  

     

     

Total Sales of all Milk Year 1 Gain/Loss Year 2 Gain/Loss

Sell @$1.50 per gallon $ (155,482.10) $ (54,382.10)

Sell @$2.00 per gallon $ (47,807.10) $ 53,292.90

Sell @$2.50 per gallon $ 59,867.90 $ 160,967.90

Sell @$3.00 per gallon $ 167,542.90 $ 268,642.90

     

Shumway Option

Scott DeFriez

Afton, Wyoming Option Estimate

Equipment $ (60,000.00)  

Repair and Install $ (20,000.00)  

Transportation to U of I $ (1,000.00)  

Total Intial Expense $ (81,000.00)  

     

     

Total Sales of all Milk Year 1 Gain/Loss Year 2Gain/Loss

Sell @$1.50 per gallon $ (195,382.10) $ (54,382.10)

Sell @$2.00 per gallon $ (87,707.10) $ 53,292.90

Sell @$2.50 per gallon $ 19,967.90 $ 160,967.90

Sell @$3.00 per gallon $ 127,642.90 $ 268,642.90

Refurbished Option

Jesse Dyer

Schier Company-Refurbished Estimate

Equipment $ (100,000.00)  

Repair and Install $ (20,000.00)  

Transportation to U of I $ (1,000.00)  

Total Intial Expenses $ (121,000.00)  

     

     

Total Sales of all Milk Year 1 Gain/Loss Year 2 Gain/Loss

Sell @$1.50 per gallon $ (235,382.10) $ (54,384.10)

Sell @$2.00 per gallon $ (127,707.10) $ 53,292.90

Sell @$2.50 per gallon $ (20,032.10) $ 160,967.90

Sell @$3.00 per gallon $ 87,642.90 $ 268,642.90

WSU Creamery

Todd Martin

Fixed Variable Total Del'dProduct Size Ingred Pkg OverHeadOverHead Labor Ship Costs Cost

Homo Gal 1.280 0.56 $0.51 $0.15 $0.92 $0.15 $3.602HG 0.640 0.41 $0.32 $0.10 $0.58 $0.10 $2.150Pt 0.160 0.31 $0.11 $0.03 $0.20 $0.03 $0.856HP 0.080 0.23 $0.06 $0.02 $0.12 $0.02 $0.531

B'Milk Gal 1.400 0.56 $0.64 $0.19 $1.15 $0.15 $4.122HG 0.700 0.41 $0.45 $0.13 $0.81 $0.10 $2.610

Chocolate Gal 1.620 0.56 $0.64 $0.19 $1.15 $0.15 $4.343HG 0.810 0.41 $0.45 $0.13 $0.81 $0.10 $2.721Pt 0.202 0.31 $0.19 $0.06 $0.35 $0.03 $1.148HP 0.101 0.23 $0.10 $0.03 $0.17 $0.02 $0.652

Recommendation

Scott DeFriez

Shumway Option @$2.50 Already passed inspection

Ready to go for operation

Old equipment, but has been kept in good condition

Profitable in first year Year 1=$19,967 Year 2=$160,967

Any Questions

Team