An intermediate dairy mixture and methods of manufacture are disclosed. The intermediate dairy mixture may be used as a base to form a dairy product, such as processed cheese, cream cheese, yogurt, and the like. The intermediate dairy mixture includes a protein powder having greater than 40 percent protein, a dairy powder, water, and salt such that the intermediate dairy mixture is non-dusting and friable and has a water activity less than about 0.87. The dairy powder is added in an amount effective to minimize agglomeration of the protein powder during subsequent hydration such that a substantially smooth dairy product is formed.