AUSTRALIA’S “cheese-centric” dairy industry is looking to higher-value uses of milk protein – such as nutritional supplements – as national milk production remains low, Rabobank said in newly-published research.
The specialist agribusiness bank explained the structural decline in Australia’s milk production over the past two decades has seen available milk protein fall by approximately 30 per cent since 2015. And this is re-shaping the country’s dairy product mix.
Where cheese has long been the main focus of Australian dairy production, premium protein products – including protein powders, high-protein beverages and yoghurt – “increasingly offer greater value uplift than traditional cheese production”, it said.
In the report, milk protein scarcity challenges Australian dairy’s cheese-centric model, the bank’s RaboResearch division said “the strategic question for the industry is shifting from how to process more milk to how to extract more value from a limited pool of milk protein”.
Report author, Rabobank senior dairy analyst Michael Harvey said the key strategic challenge for the dairy sector is determining what mix of product streams create the greatest value from an increasingly scarce pool of dairy protein.
“Overall, it is important to ensure milk protein is directed to the product stream, customer segment or market that generates the highest return,” he said.
“While cheese remains the dominant use for Australian milk (ahead of drinking milk) and a critical foundation of the dairy sector, ‘protein optimisation’ through use in high-protein products is emerging as the next growth frontier.”
