Ghee economics dont make sense

For 1 Kg Ghee, you need 20 Kg of buffalo milk or 30 Kg of cow's milk !

To make Ghee, milk alone will cost at least Rs 1200 Not to forget fuel, labor, & other overheads !

Now, the million dollar question is that how On earth is Ramdev’s Patanjali or Mother Dairy giving "Pure" Ghee at Rs 590/Kg !

Enlighten me please more  

View all 12 comments Below 12 comments
Full quantity of milk does not go into Ghee. Only the cream separated from the milk goes into making butter and then butter-fat (called "Ghee' in India). Thus, Toned Milk - cream separated - costs LESS by around Rs4/- per litre. Considering 3-4 gms fat per litre of milk, costs Rs. 4/- , cost of the butter fat is approx. Rs. 1,000/- per kg ( excluding processing costs, fixed costs, etc.) . But one has to consider the cost elements of full cream milk vis-a-vis those for toned milk. Thus, it is a matter of 'co-product' and 'by-product' costing, and hence can be satisfactorily answered by a cost-accountant having experience in dairy costing. more  
Good exercise. When production is huge, cost of production goes down. The ghee producers sell fatless milk and Lassi which reduces the cost of production. We should not always assume that everybody is CHOR. more  
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Just like AMUL does..... if your calculations are correct, the issue needs a HUGE, HARD look more  
i agree with Mukul and Vadakkuppattu, now when it has a slapped back ... they are the ones making hue and cry...... more  
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