The rise of fat-filled milk powders

Published 19 October 18

Fat-filled milk powder (FFMP) has become more common as butterfat has increased in value. AHDB takes a look at what it is, and how the market has developed.

Fat-filled milk powder (FFMP) is milk powder that has a fat content similar to whole milk powder, but instead of butterfat contains vegetable fats, for example palm oil. The fat is added to skim milk and then the product is dried to create a cheaper alternative to whole milk powder. It is possible to make FFMP from SMP, which is reconstituted, blended with the oil and then dried.

Making FFMP has been an appealing option in recent years. It has allowed processors to capitalise on high butterfat prices, while producing an alternative milk powder rather than having to make and sell SMP into an already well-stocked market. Vegetable oils such as palm and soy are much lower priced than butterfat, and have experienced less volatility, so the substitution is extremely cost-effective.

Fat prices

For buyers, FFMP is cheaper than whole milk powder while performing the same functions. It can be used industrially in bakery or making products like yoghurt. It can also be sold direct to consumers, often in countries with limited access to refrigeration, for example in Asia and sub-Saharan Africa.

The EU is one of the key FFMP producing regions in the world, though it is difficult to get exact figures for production and trade as it tends to be grouped in with other products. On the trade side it is grouped under code 19019099*, where it is estimated to make up about 50-60% of EU exports. In 2017, the EU exported 744k tonnes under this code, led by Ireland and the Netherlands. Additionally, there was 931k tonnes of intra-EU trade, led by Denmark. Total EU trade of 19019099 was worth £3.38bn. The UK exported 53k tonnes in total in 2017, worth £118million. However we do not know what the exact product mix is within this trade.

 

*19019099 - Food preparations of flour, groats, meal, starch or malt extract, not containing cocoa or containing cocoa in a proportion by weight of < 40%, calculated on a totally defatted basis, and food preparations of milk, cream, butter milk, sour milk, sour cream, whey, yogurt, kephir or similar goods in heading 0401 to 0404, not containing cocoa or containing cocoa in a proportion by weight of < 5%, calculated on a totally defatted basis, n.e.s. (excl. malt extract and preparations for infant food, put up for retail sale, mixes and doughs for preparation of bakers' wares and goods in subheading 1901.90.91)