Dairy sector food waste action plan
Prepared by Dairy Australia with Stop Food Waste Australia and the Australian Dairy Products Federation, with technical support from Rawtec and RM Consulting Group. Funded by Sustainability Victoria’s Circular Economy Business Support Fund. June 2023.
Summary published
The Australian dairy chain wastes 708,104 tonnes a year, and 72% of it happens at the manufacturing stage. That is unusual. In most food sectors the household end dominates.
The reason is whey. Half of all dairy food waste is by-product from cheese making, which the report is careful to describe as mainly unavoidable material rather than a mistake.
The account behind this plan covers more than 80% of Australia’s milk supply, built from a manufacturer survey, over 100 published reports and more than 20 interviews.
Wasted each year across the chain
Of it at the manufacturing stage
Combined waste management cost and lost product value
Of potential waste already prevented
What the account showed
Manufacturing is where the volume is
Manufacturing 506,878 tonnes (72%), food service 103,293 (15%), households 86,225 (12%), farmers 6,634 (1%) and retail and distribution 5,073 (1%). The report says plainly that the retail figure is likely underestimated and is a data gap.
Half of it is whey
By-products account for 354,949 tonnes, half the total. Process wastes 105,867 (15%), finished product 33,387 (5%) and unfinished product 21,707 (3%). By product category, cheese is 354,000 tonnes or 50%, milk 212,600 (30%) and fresh dairy 77,900 (11%).
Finished product is the expensive kind of waste
Finished product losses are only a third of the volume but carry the full input cost and the highest environmental footprint. Lost revenue from wasted finished product is $120 million a year, with the wholesale value across the chain put at $685.7 million.
Manufacturers spend $700 million managing it
Managing all potential dairy food waste costs manufacturers about $700 million a year. Set against $685 million of lost product value, the combined figure is roughly $1.4 billion.
Process waste is two problems
Dissolved air flotation sludge is 48% of process waste and cleaning-in-place another 16%, with start-up and shutdown 25%. Those three are about 89% of it.
Where it goes now
Landfill 44%, recycling and compost 30%, anaerobic digestion 2%, and food donation, animal feed and repurposing together under 1%.
Geography concentrates the opportunity
Victoria accounts for 42% of dairy waste, then NSW and ACT at 17% and Tasmania at 17%. Greater Melbourne holds 35% of the whey volume, spread across more than 60 small and medium specialty cheese and yoghurt producers who lack the capital to process it individually.
The actions with numbers attached
A milk equivalents calculator and a standard monitoring template every two years. Estimated at 70,000 to 105,000 tonnes a year, $70 to $105 million in savings and 190,000 tonnes of CO2 equivalent.
A communal processing network for Victorian small and medium producers, using thermalisation and de-watering to get past the transport barrier. Estimated at 55,000 to 85,000 tonnes a year and $170 to $260 million.
Internal reporting metrics, value stream mapping, root cause analysis, staff training and access to cleaning best practice. Estimated at 5,000 to 10,500 tonnes and $3.6 to $9.2 million.
Convert sludge and packaged goods into shelf-stable feed. Estimated at 10,000 to 25,000 tonnes and $3.5 to $9 million, though the technology is still at pilot stage in Australia.
A forum bringing manufacturers, retailers and food rescue organisations together, plus donation guidance. All the major dairy food rescue organisations report significant demand for more protein.
The plan runs on a timeline: adopt between 2022 and 2026, then trial and assess between 2026 and 2030, against the national target of halving food waste by 2030. Several actions have unquantified impacts because there is little precedent to model from. Household figures are hard to measure because milk and yoghurt often go down the sink.
Related reports
The other sector action plans.
The full report includes the root cause analysis and the ten actions with their individual impact estimates.
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