Dairy industry urged to extract more value from scarce milk protein

Australia’s dairy industry is being urged to focus on higher-value uses of milk protein as declining national milk production limits the supply available to processors.

Rabobank says available milk protein has fallen by around 30% since 2015, reshaping the country’s traditionally cheese-focused dairy industry.

Senior dairy analyst Michael Harvey says the strategic challenge is now determining which products and markets can generate the greatest return from a limited pool of milk protein.

He says premium products including protein powders, high-protein beverages and yoghurt are increasingly offering greater value than conventional cheese production.

However, Rabobank says cheese will remain a critical foundation of the Australian dairy sector, with domestic consumption exceeding 270-thousand tonnes a year.

The report says limited milk supply also means Australia’s cheese exporters will need to focus on higher-value markets, with Asia and the Middle East identified as key opportunities.

Mr Harvey says growth in high-protein dairy products is expected to complement, rather than replace, cheese production.