Bakers prefer butter, helping prices soar
Consumers around the world are willing to pay more for products containing dairy and this is driving demand for butter and cream, says Fonterra.
The northern Victorian consultancy Profitable Dairy Systems has completed a feasibility study for a 250 head pilot farm on a greenfield site just south of New Delhi.
The new dairy is expected to be a forerunner to multiple 2500 cow units built by a major processor keen to source high quality milk for middle and upper class Indian consumers.
Project leader Philip Chamberlain, a Queensland veterinary dairy specialist, is working closely with Austrade in the emerging market which he said held enormous potential for Australian businesses.
"There is great commercial opportunity for a range of Australian expertise from the provision of tropically-adapted genetics to nutrition, animal husbandry and farm management. Training and other ancillary services will also be required – they need a complete package," Chamberlain says.
"Until now India has not known a lot about the dairy expertise Australia has to offer."
A diverse group of 12 potential Australian suppliers has come together following the success of a mission led by Trade Minister Andrew Robb and Parliamentary Secretary for Agriculture, Senator Richard Colbek, which attended Australian Business Week in India in January.
"It makes sense to pool Australian resources as one person or company couldn't do it alone," says Chamberlain.
Anirban Deb is an experienced Austrade business development manager in India who has a key focus on opportunities in the growing dairy sector.
"India is actually the largest fresh milk producing country in the world with production of 130 million tonnes per annum. The national milking herd comprises about 122 million cows and 90 million buffalos."
Speaking during a visit to Australia in May, Deb said the Indian industry was struggling to keep pace with a 7% annual growth in milk demand.
"The animal-to-land ratio had reached saturation point which has caused the focus to shift from low input-low output to high input-high output production systems to increase milk yield," says Deb.
"This change in market dynamics is encouraging the development of large new intensive dairies which will lift efficiency and productivity."
There was significant interest in large scale projects by corporations, entrepreneurs and progressive farmer associations.
Deb said a new national 15-year dairy plan still has a major focus on small scale farmers with production aggregated in a cooperative system.
A key outcome of the plan is improving milk yield per animal with a scientific approach to animal breeding and nutrition.
"Milk quality is also becoming an issue with demand rising for value added products including cheese and yoghurts," Deb says.
New feedlot dairies were coming up with innovative sales and marketing models, including direct supply of pure milk direct to consumers. With an assured cool chain, this premium milk was bringing almost double the price of regular retail product.
"Milk has traditionally been a cheap source of protein for the masses in a country in which the slaughter of cattle is against the law," Deb said.
Chamberlain says Indian producers have looked to source Holstein dairy genetics from North America in their quest for improved production.
"But significant difficulties have been experienced with herd fertility in the hot and humid Indian environment.
"In our feasibility study, we have recommended the sourcing of tropically adapted Australian dairy genetics."
