Over the last 12 months, New Zealand has embarked on a strategy to reduce its reliance on the export of whole milk powder to China—a redistribution mirrored by the EU in terms of sales of milk meant for cheese to Russia.
Both New Zealand and Europe have now placed greater focus on skimmed milk powder and butter, and have expanded their market horizons to the wider Asia-Pacific region of southeast Asia, Korea, Japan and the Middle East, as well as key American markets and Mexico.
As competition between producing nations has intensified this year, New Zealand has seen a fillip in cheese export volumes, and is shortly expected to challenge America for the title of the world’s biggest cheese exporter.
Yet USDEC believes there is a question mark over where New Zealand and Europe will direct their milk supply and processing capacity investments if there is no change in Chinese buying habits or the terms of the Russian embargo this coming year.
In recent years, New Zealand has invested in everything from milk powder to more high-value products, including lactoferrin, UHT milk, milk protein concentrate and cheese, while European processing majors have invested heavily in plants to dry milk powders and whey proteins.