Dairy Industry

The challenges

As Australia’s third-largest rural industry, dairy generates $13 billion across the supply chain. Downstream processing and value adding comprise $9b of this, making dairy an important contributor to the Australian economy. At the retail end, “clean, green” farming methods and strict food-safety standards are drivers of Australian dairy products’ premium status in export markets — particularly in Asia and across higher-value markets.

Processors and manufacturers have welcomed signs that the Australian industry is recovering, yet they still face some challenges, including:

• Lower total milk intakes: directly resulting from low farm-gate milk prices reducing herd numbers and hence milk volumes produced
• Market complexities: such as trade restrictions and market access, specifically in the Chinese market, affecting downstream dairy businesses, seeing sales forecasts cut and projects cancelled
• Rising supplies: coming out of New Zealand
• Uncertainty: as to how the EU stockpile will be disposed of
• Sluggish global markets
• Dairy milk substitutes: gaining market share and consumer mind space, such as with the rising popularity of paleo and vegan diets

Despite the lower total milk intakes, some processors increased their milk-pool share and/or filled volume gaps by recruiting more suppliers. Improving farm-gate prices and pending new manufacturing capacity in 2017 will help to maintain competition for milk at the farm-gate and continue to strengthen the industry.

Processor innovation is also behind strong domestic sales growth, with increases in the value and volume of supermarket sales of cheese, dairy spreads and milk (with branded fresh white milk regaining market share from supermarket private labels); while yoghurts and snacks also saw a volume increase.

What’s at foodpro to help your business?

Australian dairy processors’ focus on innovation and sustainability remains an industry strength. For example, technology changes in how milk-powder is produced and its uses drove Australian processors’ expanding specification ranges, enabling them to meet changing customers needs; while R&D saw a previous waste product (whey) become a sought-after ingredient as Australian processors created new markets.

At foodpro, dairy processors will continue to see new, advanced processes, machinery and technologies, as well as ideas for new products and new types of packaging. Just some of the types of leading-edge developments on display include:

• Product testing, QA and laboratory equipment
• Processing machinery
• Filling and packaging technology
• Coding, labelling and vision inspection
• Ingredients

See here for a full list of exhibitors.

Food safety is highly important in dairy manufacturing and integrity paramount throughout the supply chain. Reflecting this, foodpro will run a series of Supply Chain Integrity Seminars covering traceability issues, such as electronic data interchange management, measuring and tracing allergens, barcoding, the regulations around organics and packaging. Free education sessions [future link when the programme goes up] will also be run on other topical industry issues, such as best practices.

The pressures that processors face make it vital to stay on top of the latest information and technology. All this, and more, is at foodpro.