Integrated Byproduct Streams for Enhanced Viability of Combined Dairy Farm and Milk Processing Operations

2016 Annual Report for SW14-015

Project Type: Research and Education
Funds awarded in 2014: $295,688.00
Projected End Date: 03/31/2018
Grant Recipient: Utah State University
Region: Western
State: Utah
Principal Investigator:
Dr. Donald McMahon
Western Dairy Center, Utah State University

Integrated Byproduct Streams for Enhanced Viability of Combined Dairy Farm and Milk Processing Operations


Small and mid-sized family farmstead or artisan dairy manufacturing operations have the challenge of how to dispose of whey produced from cheese making as it carries a high biological oxygen demand. This project takes a multi-disciplinary systems approach to solving the waste problem while at the same time ameliorating the nutrient balance issues on dairy farms, lowering the carbon footprint and greenhouse gas emissions, and providing an opportunity for additional revenue needed for a sustainable dairy farm—dairy manufacturing business for rural families, and building more visible linkages between farms and consumers.

The ultimate goal of this project is to demonstrate how all the whey (and any waste product from equipment rinsing) generated in an artisan dairy manufacturing operation can be combined with manure from the dairy farm in an aerobic digester to generate a deodorized biofertilizer and combustible gases. And to provide tools that will enable farmers to make an informed judgment on the costs and economic viability of starting an artisan dairy manufacturing operation in conjunction with their dairy farm.

Although encouraged for use on farms, digester systems do not function efficiently when the input is just manure because they lack easily fermentable carbohydrate. The sugar in whey greatly increases digester efficiency and we aim to determine the optimum combinations of whey and manure, and the best digester system that will provide an economic return for use by the ag-in-the-middle dairy farmer.

Objectives/Performance Targets

  1. Collect data and determine on 3 dairy farms (Logan, UT; Midway, UT, Colorado City, AZ): (a) their current nitrogen and phosphate balance including nutrient imports and exports and manure production and usage, and (b) their current economic balance of costs versus expenditures.
  2. Collect data and determine for 3 dairy processing operations (2 associated with farms [Heber Valley Dairy/Artisan Cheese in Midway and Meadowayne Dairy in Colorado City] and one independent operation [Aggie Creamery in Logan]) over a year of operation: (a) their balance regarding milk and other ingredient inputs versus food products generated for sale, (b) composition and quantity of liquid waste such as whey and equipment rinsings, and (c) an economic evaluation of products made and sold and associated waste disposal costs.
  3. Use the dairy processing data to model anaerobic digestion for each operation, and determine the extent of manure that can be blended with the total waste processing stream to optimize (a) production of biomass suitable for sale as deodorized soil condition, (b) production of energy as combustible gases (with or without conversion into electricity), (c) conversion of manure into biomass suitable for land application on the farm. In conjunction with this modeling, construct a lab scale digester that can be operated under the various specified conditions to confirm and refine the computer model.
  4. Determine the economic viability of each situation based upon Objective 3 that includes (a) sale of biomass and carbon credits, (b) impact on energy, (c) savings on waste disposal, (d) costs of transport of whey (when the processing operation is separate from the farm), and (d) nutrient management on the farm.
  5. Determine the improvements in nutrient balance on the farm based upon the various scenarios, and the benefits accrued by adding a processing system to milk production on a dairy farm.
  6. Determine the appropriate digester system needed for each scenario to achieve the best return on investment and most efficient long-term operation that would suitable for various size operations.
  7. Determine the benefits related to farm sustainability and solid and liquid processing waste disposal for farm and processing operations that range include small farmers, Ag in the middle farmers, and large farms
  8. Evaluate social and economic benefits related to (a) maintaining farming operations along with dairy product manufacture in rural and near rural locations, (b) reducing odor nuisance issues, and (c) developing stronger connections between consumers (who purchase products from the processing operation) and the dairy farms where the milk originates.
  9. Include in a previously developed model of profitability of artisan cheesemaking the costs and options of whey disposal and the economics of having an integrated farm/factory waste and nutrient management system.

Provide through face-to-face meetings, online resources, webinairs, how-to-videos, outreach to (a) established dairy farmers who are faced with the situation of staying in or leaving the dairy industry, (b) established dairy processors who must resolve low-value high BOD/COD waste streams, and (c) people looking to enter the artisan farmstead arena.


During 2015-2016, laboratory-based trials were conducted on the efficiency of anaerobic digestion based on combinations of manure and cheese whey and its influence on biogas production as well as determining feasibility of using the biomass as a soil conditioner. This was performed by a Master of Science student, Dillon Fallon, in the Nutrition and Food Sciences Department. The business enterprise analysis was completed as a Master of Science in International Food and Agriculture thesis by Steven Chans Lund in the Applied Economic Department. This was based on a previous enterprise models for a 210-cow dairy in Idaho that was adjusted for the 2015 situation in Utah, and adding in and enterprise analysis of small scale cheese manufacturing and an anaerobic digester.

Anaerobic Digestion Efficiency

This work was performed by a Master of Science student in the food science program. Manure was obtained from the Buchanan dairy from adult Holstein cows and then blended until its components (manure, undigested plant material) were homogenous. Cheese whey was obtained from the Aggie Creamery at Utah State University and filtered to remove any cheese fines. Some of the whey was adjusted to pH 4, 6, and 8. Activated sludge was obtained from the Central Weber Sewer District (Ogden, UT). Chemical oxygen demand (COD) for these starting materials was 42,100, 80,200 and 10,980 mg/L respectively.

Initially, bio-methane potential was determined for manure:whey mixtures of 100:0, 75:25, 50:50, 25:75, and 0:100 along with an additional 10% of the activated sludge and 1% of a chemical nutrient supplement solution.

The sample weights were adjusted to provide the same total chemical oxygen demand since on a weight basis whey has double the chemical oxygen demand of manure. The mixtures, along with the activated sludge and mineral and vitamin supplement, were placed in 140-mL glass bottles fitted with a syringe inserted through a rubber septum and flushed with nitrogen. The samples were incubated at 35°C, and when gas had filled the syringe (~60 mL) the syringe was withdrawn and gas composition measured using gas chromatography and volume of methane and hydrogen produced was calculated. Then the syringe was replaced and digestion and gas collection continued. Statistical analysis was performed with effects of percent whey (n=4), whey pH (n=3) and sampling time (n=3) and their two-way and three-way interactions.

Percent whey significantly (P ≤ 0.01) affected volume of hydrogen and methane produced as well as pH at the end of digestion. Biogas from mixtures containing 25% or 50% whey contained primarily methane and no or little hydrogen and were not significantly different from each other. Biogas from mixtures containing 75% or 100% whey contained primarily hydrogen and no or little methane and were not significantly different from each other. The pH of the whey had less effect on gas production than whey percent. The difference in biogas composition was explained by the higher level of fermentable carbohydrate (lactose) in whey.

After digestion, pH was significantly decreased when whey percent was increased to 75%. Mean pH values were 6.51, 6.50, 6.36 and 6.19 for mixtures containing 25, 50, 75 and 100% whey, respectively. In summary, adding more than 25% whey caused more inconsistent gas production (i.e., greater variation in time to produce the first 60 mL of gas, and more failures occurring during digestion (i.e., gas production ceased before the end of the experiment). This puts limitation on the amount of milk that can be converted into cheese in a farmstead dairy farm – cheese manufacturing enterprise.

For a 210-cow dairy farm, with an average milk production of 80 lb per day and a manure production of 110 lb per day, the amount of milk that can be converted into cheese and the resultant whey combined with manure is dependent on how much manure can be collected and used in the digester. This depends on whether the cows are pasture grazed or kept in confined housing. If only 60% of the manure is applied directly to the fields by the animal then there is only 65,000 lb of manure per week available to the digester. At a 25% substitution rate, this would allow processing of 22,000 lb of whey per week. This would be generated from conversion of 24,000 lb of milk per week into ~2,400 lb of cheese. Based on the total milk production from the dairy farm, this limits the conversion of only 21% of that milk into whey with the remainder having to be sold as bulk milk. In a constrained housing system in which 100% of the manure can be captured and fed to the digester, the milk utilized for cheese making can increase to 50%.

Characterization of Digester Biomass.

Additional incubation was performed in a 60-liter capacity induced bed digester with a hydraulic retention time of 10 days, using 15% whey with manure so as to maximize biomass production rather than biogas. The effluent was then collected and air dried and examined for its potential use a soil amendment. The microbiota of the biomasses was then compared to that of manure. The biomass was tested for bulk density, total porosity, air capacity, and water-holding capacity and compared to a commercial potting mix.

Compared to manure, the biofermented manure and manure/whey mixture had a 99.9% decrease in total fungi, 99.2% decrease in flagellate protozoa, 99.8% decrease in amoebae protozoa and a 97% decrease in ciliate protozoa.

The water holding capacity of the biofermented manure was not significantly different from the biofermented manure/whey mixture with values of 55.2% and 61.0% respectively.   The water holding capacity of the commercial potting mix was significantly lower at 32.6%. In addition, the air capacity of the manure biomass was 8.5% and that of the manure/whey biomass was 5.6%. Both of which were higher than the 2.2% air capacity of the potting mix.

Business Analysis

The enterprise business analysis was completed as a Master of Science in International Food and Agriculture thesis by Steven Chans Lund an entitled “An analysis of the feasibility of anaerobic digestion on small-scale dairies in Utah.”

The purpose of this study was to analyze the feasibility of implementing anaerobic digester systems on small-scale dairy farms (i.e., 210 cows) in the state of Utah with an annual cheese production of about 100,000 pounds. 

Enterprise budgets were used to calculate net present value (NPV) and internal rate of return (IRR) from equipment price quotes, estimations from literature and using estimated annual receipts and costs for a 210-cow dairy farm in Utah, an artisan cheese plant producing bottled milk and cheese, and an inverted bed reactor anaerobic digester to handle manure and whey. Each enterprise was analyzed separately and integrated together to provide hypothetical models of annual costs and returns that can be viewed as a tool to help farmers make decisions about investments.

Total costs for the dairy farm was $758,538 and based on 2015 milk prices this provided a net income (NI) of -$371 per head of cow. Initial investment cost for the artisan milk processing, cheese making and retail facility was $1,658,984 ($7,900 per head). Total operating costs were $898,835 with NI of $198,020 ($943 per head). How the cheese is marketed impacts NI as cheese can be sold directly by the artisan cheese maker (either through a retail store or online) at $29/kg compared to $17/kg or $9/kg if sold wholesale or through a distributor, respectively.

Total cost for the anaerobic digester was $320,621 (after a 10% investment tax credit) that equates to $1,527 per head. Total operating cost was $66,238 with NI of $2,105 ($10/head) based on electricity generated and sale of digester biomass, carbon offsets and services for managing digestion of whey, manure and other organic wastes. For adding an artisanal cheese making facility producing 47,000 kg of cheese per year, NPV was estimated at $580,739 with 39% IRR. In comparison, NPV for the digester system was -$65,378 with IRR of -5.2%. For investment in a digester to be acceptable, a 12% discount rate is needed, meaning that 35% of the investment cost must be subsidized.

Impacts and Contributions/Outcomes

Successful anaerobic digestion of organic wastes requires a stable microbial community to be maintained in the digester that will break down the materials and convert them into biogases and a deodorized biomass. Addition of whey to the digester provides a readily fermented carbohydrate source in the form of lactose. In contrast, manure contains few fermentable carbohydrates but is high in nitrogen. If too much whey is included then the reactor becomes more acidic and the pH drops, this can lead to changes in the bacterial community in the reactor. At the least, the lower pH prevents conversion of hydrogen into methane (this occurs with 75% substitution of manure with whey) and can lead to the bacteria no longer producing any biogases.

Including 25% whey did not prevent conversion of hydrogen into methane or prevent biogas production. Keeping the whey to this level places a restriction on how much of the milk produced on a dairy farm can then be converted into cheese and still have all the whey fed into digester. If pasture feeding is used on the farm and therefore only a portion of the manure can be collected for use in the digester, there is only enough manure to handle whey from 20% of the milk produced on the farm. If the cows are kept in confined housing and all the manure utilized for the digester then up to 50% of the milk can be converted into cheese and still have all the whey going to the digester.

Having a commercially-valuable product in the form of deodorized biomass coming from the digester can help in making it economic to include a digester in the operations of the dairy farm and milk processing operation. The biomass produce from anaerobic digestion of manure or the manure/whey mixture has potential for replacement of peat as a soil conditioner and component of potting mix. It has the advantage that peat is a non-renewable resource while the digsester biomass can be made on a renewable basis.  

The key attributes for a potting material are air capacity and water holding capacity. Having a higher total porosity can increase both of these. Plant roots need air to grow. Having a higher air capacity in the biomasses compared to potting mix is positive. It supports having healthier roots which means healthier plants. A higher water holding capacity means that as a potting mix, its needs less frequent watering.


Dr. Lisbeth Goddik
Professor and Ext. Specialist in Dairy Processing
Food Science and Technology Dept, Oregon State University
100 Wiegand Hall
Corvallis , OR 97331
Office Phone: 5417378322
Winfred Barlow
Owner Farmer
Meadowayne Dairy Inc
385 N Juniper
Colorado City, AZ 86021
Office Phone: 4356569506
Dr. Donald McMahon
Western Dairy Center, Utah State University
8700 Old Main Hill
Logan, UT 84322-8700
Office Phone: 4357973644
Bryce Buchanan
Owner Farmer
601 West 200 South
Smithfield, UT 84335
Office Phone: 4355635752
Dr. DeeVon Bailey
Applied Economics Dept, Utah State University
4835 Old Main Hill
Logan, UT 84322-4835
Office Phone: 4357972300
Dr. Conly Hansen
Nutrition, Dietetics and Food Sciences Dept,Utah State University
8700 Old Main Hill
Logan, UT 84322-8700
Office Phone: 4357972188
Dr. Grant Cardon
Associate Professor
Plants, Soils and Climate Dept, Utah State University
4820 Old Main Hill
Logan, UT 84322-4820
Office Phone: 4357972278
Dr. Ruby Ward
Associate Professor
Applied Economics Dept, Utah State University
4835 Old Main Hill
Logan, UT 84322-4835
Office Phone: 4357972323
Grant Kohler
Owner Farmer
Heber Valley Artisan Cheese
PO Box 182
Heber City , UT 84032
Office Phone: 8013585602
Dr. Allen Young
Professor and Extension Specialist
Animal, Dairy and Veterinary Sciences Department, Utah State University
4815 Old Main Hill
Logan, UT 84322-4815