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Michael Harvey, Rabobank
A new Indonesian school milk programme is expected to significantly increase the country's total dairy consumption, creating opportunities for New Zealand and other global dairy players.
According to a Rabobank report, Indonesia's new school milk programme could nourish minds and global dairy markets. The recently-elected Indonesian government has introduced a range of policy measures with the potential to transform the country's dairy supply chain.
"The centrepiece of its policy is the Nutritious Meals Programme, which aims to combat malnutrition and promote healthy eating among school children," report author RaboResearch senior analyst Michael Harvey says.
"A key feature of this programme is to provide food, including milk, to 60 million students on every school day by 2029. RaboResearch estimates the total milk required at full implementation could surpass 2 billion litres.
"This estimate is based on an anticipated 83 million recipients accounting for school absenteeism, lactose intolerance, and an average serving size between 125ml and 200ml."
The report says the ambitions behind Indonesia's school milk programme have the potential to significantly increase Indonesian demand for liquid milk.
"The majority of milk consumed by Indonesia's 280 million people in 2024 was imported, with domestic production estimated at 900 million litres, and an additional 2.5 billion litres (liquid milk equivalent) imported," Harvey says.
"To meet the growth in demand that will result from the programme, the government and industry plan to significantly increase the national dairy herd."
As the rollout of the programme gathers pace, the report says, investment across Indonesia's dairy sector is expected to accelerate, with more pronounced impacts on the global sector.
"For Indonesia to achieve its ambitious milk supply growth targets and accommodate the considerable number of dairy cattle needed, it will need to scale up both live cattle supply and the local dairy supply chain," Harvey said.
"This will include need for feed genetics, farm infrastructure and farm management skills to support the expanding local industry.
"And overall, we expect global input players and dairy companies to benefit."
While the school milk programme is likely to increase domestic supply and provide a tailwind for local Indonesian dairy players, Harvey says, Indonesian dairy import demand is also expected to rise.
"Fundamentally, RaboResearch expects Indonesia to remain a net importer of dairy and anticipates that annual import volumes are likely to grow over the medium term," he says.
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