Dairy product production and lactose demand in New Zealand and Ireland under different simulated milk product–processing portfolios

Abstract

Maximising dairy industry profitability involves maximising product returns for a specific set of costs or minimising costs for a certain level of output. A strategy currently utilised by the New Zealand dairy industry to optimise the value of exports is to incorporate imported lactose along with local milk to maximise the production of whole milk powder (WMP) while complying with the Codex Alimentarius (Codex) standards, in addition to increasing the exported product for every litre of milk. This study investigated the impact of different product portfolio strategies on lactose requirements for the Irish and New Zealand dairy industries for current and predicted 2020 milk output projections. A mass balance processing sector model that accounts for all inputs, outputs and losses involved in dairy processing was used to simulate the processing of milk into WMP, skim milk powder (SMP), cheese, butter and fluid milk of different proportions. All scenarios investigated projected an increase in production and revenue from 2012 to 2020. Higher cheese production reduced industry lactose demand through whey processing, while scenarios reliant on an increase in the proportion of WMP were associated with increased lactose deficits.