Is whey (the liquid remaining after milk has been curdled and strained) a byproduct that does not increase demand for dairy? Is whey powder just a handy use for a food product that would otherwise go to waste, or is it a thing like cheese that creates demand on dairy to make?
No it’s a waste product that’s been repurposed. New Zealand has one of the largest dairy industries and only a fraction of the whey produced is used for human consumption (such as cheese and protein supplements) 1. The vast majority of whey is used for fertiliser which would otherwise go to waste. The majority of milk produced is used to make milk and milk powder. These are more profitable than butter or cheese but cannot be shipped as far (statistics from MAFF Japan, where butter shortages frequently occur and tax incentives are being used to counter this). This would still be the case, whether or not there were demand for whey. It is arguably better that whey is reused than discarded as it was once a significant source of environmental pollution until it began to be used 2.
- N.W. Sneddon, N. Lopez-Villalobos, R.E. Hickson, S.R. Davis, U. Geary, D.J. Garrick and L. Shalloo Irish Journal of Agricultural and Food Research Vol. 55, No. 2 (2016) Dairy product production and lactose demand in New Zealand and Ireland under different simulated milk product–processing portfolios pp. 126-135
- S. S. MARWAHA J. F. KENNEDY. International Journal of Food Science & TechnologyVolume 23, Issue 4 (1988) Whey—pollution problem and potential utilization
Yes, it's a waste product that's been repurposed. Repurposed into a product.
So this may sound like a trick answer, but I think it depends what you mean by demand.
Just because it doesn't make people demand "more dairy please", doesn't mean it doesn't achieve the same end result for the industry.
The bottom line for the dairy industry is money in the bank, if people buying more cheese will do it, fine. If shoehorning dairy as a hidden ingredient in a product there is demand for will demonstrate indirect demand for dairy, that's also fine.
Likewise, if they make money from whey (or otherwise benefit in some reciprocal arrangement or avoiding disposal costs/fines), it's good for the industry, even if it doesn't technically increase consumer demand.
So, it depends if you are concerned with the fact of demand or the outcome of demand. I think it's a drop in the ocean... and better than it being dropped in the ocean.