Dairy should look for export opportunities

Dairy should look for export opportunities, Gira's Christophe Lafougere tells ADIC industry breakfast

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EXPORTER: Australia will continue to be a key exporter of dairy products.

EXPORTER: Australia will continue to be a key exporter of dairy products.

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Australian domestic consumption of dairy products was likely to equal its production of milk by 2026, but there are still opportunities for export.

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Australian domestic consumption of dairy products was likely to equal its production of milk by 2026, but there are still opportunities for export, an industry breakfast on Wednesday heard.

That's because Australia would continue to be an importer of dairy products, global dairy consultancy Gira managing director Christophe Lafougere, speaking from France, told the Australian Dairy Industry Council's virtual event.

"It's important to remember you are the fourth biggest exporter at world level, after the EU, New Zealand and the US," he said

He warned Australia to focus on high-value markets, pointing to opportunities in China and south-east Asia, given their proximity.

China would account for 26pc of the growth in dairy consumption in the world in the next five years.

"China will continue to lead the game," he said.

Australia could move to being like Italy, importing low-value products and exporting high-value products

READ MORE: Lower dairy production bolsters prices

Mr Lafougere said the global dairy market would continue to favour exporters.

Although accelerated production growth was expected in the United States, China, Russia and Pakistan, import markets were expected to grow by more.

Milk production growth was expected to slow in Europe and Oceania, primarily due to environmental constraints and the impact of climate change.

READ MORE: Milk price to rise on the tide of global demand

Mr Lafougere said the export product mix was changing.

Liquid milk, including UHT milk, was Australia's largest dairy export, but this market was expected to decline in the next five years, mainly due to increased production of that commodity in China.

The hot ticket items in exports markets would be cheese and milk fats.

"Everybody will eat more cheese in the next five years," Mr Lafougere said

Cream and solid dairy fats were growing imports markets around the world, particularly in China in the food service sector.

Mr Lafougere gave an example of the type of high-value product that could be developed for the Chinese market.

The Chinese liked to have thick cream on the top of their macchiato coffees, with cafes initially mixing vegetable oils into cream to create the right consistency.

But consumers didn't like the taste.

Fonterra and other processors subsequently developed a product using cream cheese mixed into cream, packaged ready to be used in cafes.

The technical dairy ingredient export market was also expected to grow.

Mr Lafougere said another key trend for dairy around the world was sustainability, warning the industry to expect to see increasing environmental laws.

READ MORE: Dairy Industry sets new targets for sustainability

New measures to be in place in the EU by 2023 were likely to slow growth and lift the cost of production there.

Dairy alternatives were also growing globally with most dairy companies also now offering these products.

For the most part, plant-based products would be a niche but fermentation products had the potential to undermine the existing dairy industry.

"With fermentation, you are able to replicate dairy products without a single cow," Mr Lafougere said.

Although these were currently expensive, the process would be scaled up in the next 5-7 years, bringing the cost down.

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The story Dairy should look for export opportunities first appeared on Farm Online.

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