Ministry of Primary Industries chief scientist John Roche says the dairy industry must have regard to consumer trends and concerns, such as their lack of confidence in dairy cattle having a good life.
Huge investments into alternative foods should not impact the growing demand for natural dairy products and the confidence consumers have in dairy, Ministry of Primary Industries (MPI) chief scientist John Roche says.
“Population growth means that in the next 30 years we will need as much protein as we have produced in the past 2000 years,” Roche said.
“As a species, we will need every scrap of protein we can get our hands on.”
He told the Northland Dairy Development Trust annual conference on webinar that the global retail markets for total dairy products are forecast to grow at 5% annually to reach US$464 billion in 2026.
By contrast, the alternatives to dairy have global markets about 10% the size and they are growing at a similar rate.
“Dairy alternatives are yet to build momentum off the back of the demand for dairy,” he said.
“Their growth also tends to be cannibalistic, with consumers switching between various non-dairy options.”
Surveys show that milk has majority support, with low levels of dislike, but alternatives have larger numbers of dislikes.
The huge investment into alternatives will address those dislikes, such as soy’s gritty taste.
However, the dairy industry must have regard to consumer trends and concerns, such as their lack of confidence in dairy cattle having a “good life”.
New Zealanders have awareness and confidence in dairy, in the way it is produced, nutrition and food safety.
But that can rebound when consumers find out something they don’t like that they didn’t know.
Delving into ethical considerations when making consuming choices, Roche said high animal welfare standards and environmental considerations were right up at the top.
Support for workers and farmers’ welfare was also high on the list.
“The vast majority of NZ consumers think farmers are doing a good job and potentially could do a better job,” he said.
Two groups of consumers are those who are value-driven and those who are values-driven, looking for products that align with their personal values.
“NZ production can meet both expectations, with foods that have some of the highest natural values produced at some of the lowest costs in the developed world,” he said.
Roche said market growth of sustainable products exceeded conventionally marketed products by five times.
Fortunately, dairy products like milk, yoghurt and cheese are well-represented in that sustainable category.
Roche pointed to the strong demand for dairy fat products, which helped boost the Global Dairy Trade Index to its highest level, in contrast to the 2013-14 boom led by milk powders.
Russia’s trade in dairy products, now suspended, would not impact world prices as it had in the past.
MPI was projecting a new record export revenue from dairy products this financial year, on top of the record set last year.
“The forecasts for farm gate milk prices next season are all high and may prove to be conservative,” he said.
However, the past two years of inflationary pressures were also noteworthy, with almost all farming inputs now 15-20% higher in price than they were 10 years ago.
“Dairy grazing is leading the way, being 50-60% more expensive than it was 10 years ago,” he said.