Liquid milk key to growth - analyst
An Auckland-based global analyst has warned that neither New Zealand nor Ireland is adequately prepared for the growing demand in key markets for liquid milk over the coming decade.
KPMG's global head of agribusiness, Ian Proudfoot, said both countries have not yet come to terms with the fact that within 10 years, the bulk of our respective dairy consumers are likely to be demanding liquid milk.
"We are both looking to sell to consumers who don't have a lot of water available, yet we sell them powder with the expectation that they will rehydrate it," he said.
"I think whoever unlocks that ability to become a true, economic, innovative liquid supplier is going to be in the market that will prove to be a leader in dairy for the next generation."
Mr Proudfoot said that since the abolition of quotas earlier this year, he has been impressed by how the Irish dairy sector has focused on higher value products, such as proteins and complex ingredient solutions, rather than producing additional commodity milk powder.
"If you look at where we are investing in New Zealand, we are still building a lot of base driers to handle volume, so the ability to create more value from that product is very challenging," he added.
As Ireland's milk production has powered ahead with 6.2 billion litres expected this year, the volume is down 4pc in New Zealand in the first four months of the season.
Ireland's Food Wise 2025 strategy projects agri-food exports to increase 85pc to €19bn by 2025.