How milk could help cure Alzheimer’s, Parkinson’s [VIDEO]

A new study on UHT milk is helping scientists to better understand Alzheimer’s, Parkinson’s and type 2 diabetes, opening the door to improved treatments for these age-related diseases.

About 500 million people worldwide suffer from these diseases, which cause millions of deaths each year.

Co-lead researcher, ANU Professor John Carver (pictured), said that two unrelated proteins aggregate in UHT milk over a period of months to form clusters called amyloid fibrils, which cause the milk to transform from a liquid into a gel.

He said the same type of protein clusters are found in plaque deposits in cases of Alzheimer’s and Parkinson’s.

“Parkinson’s, dementia and type 2 diabetes are big problems for the ageing population in Australia and many other countries around the world,” said Professor Carver from the ANU Research School of Chemistry.

“Our interest in milk proteins led to a discovery of the reason for this gelling phenomenon occurring in aged UHT milk.”

“The research does not suggest UHT milk can cause these age-related diseases.”

Professor Carver said milk proteins changed structurally when heated briefly to around 140 degrees to produce UHT milk, causing the gelling phenomenon with long-term storage.

He said normal pasteurised milk did not form amyloid fibrils.

ANU worked with CSIRO, University of Wollongong and international researchers on the study, which is published in the journal Small.

 

Image Credit: Stuart Hay, ANU.

Australian dairy expected to recover in 2017/18

Australian dairy farming businesses should see a much-needed return to profitability in the 2017/18 season, according to a recently-released report.

The Australian Dairy Sector – Climbing off the canvas, by agribusiness banking specialist Rabobank, says extenuating circumstances have meant the recovery in global dairy markets is yet to flow through the value chain. However, some of the forces should dissipate in 2017/18, and this will help deliver higher full-year milk prices for Australia’s dairy exporting regions.

Based on Rabobank’s latest commodity price forecasts (outlined in its upcoming Global Dairy Quarterly) and assuming a currency rate of USD 0.75, the report says the global market would deliver an average commodity milk return equivalent to AUD5.30/kgMS in 2017/18.

While the prospects of global commodity prices remaining elevated throughout next season are sound, the report warns there are some risks to the commodity and currency outlook, which need to be carefully monitored.

“With this recovery being largely supply driven, recent price trends highlight how improvements in milk production across the export ‘engine’ can alter finely-balanced fundamentals,” said report author, Rabobank senior dairy analyst Michael Harvey.

Providing global commodity markets remain at, or near, current levels and domestic market returns improve with greater efficiencies in the processing sector, Harvey said, it is possible for the Australian export sector to capture a market premium.

“Historically, the Australian export sector has captured a premium beyond commodity returns,” he says, “and with the right conditions this could see full-year milk prices reach AUD5.70/kgMS,” he said.

For dairy farmers selling to the domestic fresh milk market, Harvey said premiums remain elevated compared to export regions, with these regions largely immune from recent global forces.

“However, while the outlook suggests the price floor for fresh milk will be lifted in time – given the reduction in availability of milk for transport and improving export milk prices – it is not all smooth sailing for those in the fresh milk regions,” he said.

“The biggest risk facing dairy farmers in these regions hinges around security of their supply contract and the timing of contract renewal, which was evident recently with the supply imbalance in Western Australia.”

 

Bellamy’s chairman Rob Woolley quits

Bellamy’s Australia chairman Rob Woolley (pictured) resigned from the company this morning, ahead of a meeting that is expected to result in changes to the board.

AAP reports that, at that meeting, the infant formula maker’s shareholders will vote on a board spill led by Kathmandu founder Jan Cameron. It is expected that three directors will be the targets of the meeting.

As the AFR reports, former Virgin Australia director David Baxby is a potential replacement for Woolley.

New Chinese regulations have dramatically lowered the company’s sales in China, and its shares have fallen sharply. Previously, booming demand in that country had seen its share price soar.

On January 12, the company ended a 40-day trading halt and also announced a cut to its profit guidance for the next six months.

Shares in Bellamy’s last traded at $4.27.

Image: Bellamy’s

Murray Goulburn posts $31.9m loss

Australia’s largest dairy processor Murray Goulburn (MG) has posted a first half loss of $31.9m, following lower supplies and adverse weather conditions.

The result contrasts the $10m profit the co-operative posted in the previous corresponding period. In addition, revenue dropped 14.8 per cent for the previous corresponding period.

As the SMH notes, last April MG retrospectively cut farmgate milk prices (or the price it pays farmers for milk). This has seen some producers leave the industry. Coupled with record rainfall in parts of Victoria last September, this has resulted in a 20.6 per cent fall in milk supplies.

“The first half of this financial year has been a particularly challenging time for MG. Record rainfalls and high levels of competitor activity have reduced our milk intake, impacting revenue and our ability to fully recover fixed costs and overheads,” said MG’s recently appointed Chief Executive Officer, Ari Mervis.

“In addition, although the recent increases in the global prices of dairy commodities are welcome, they have not recovered in time to impact on MG’s first half sales volume.”

According to the ABC, the company has confirmed it will cut 200 staff as part of a restructure. The company is also reviewing its assets, however there has been no word about possible factory closures in Gippsland and northern Victoria.

As the SMH reports, MG also confirmed that it is under investigation by the corporate regulator Australian Securities Investments Commission over potential breaches of the Corporations Act. On top of that, the Australian Competition and Consumer Commission is investigating the company over possible breaches of the Competition and Consumer Act.

A2 Milk Company profit goes through the roof

Infant formula maker A2 Milk has reported first half net profit after tax of $NZ39.4 million ($36.8 million), a 290 per cent increase over the previous corresponding period.

The company said in a statement the result was higher even than profit for the full 2016 financial year.

The result reflects strong demand for the company’s infant formula, both in Australia/new Zealand and China. Revenues increased by 62 per cent and 348 per cent in Australia and China respectively, and Operating EBITDA by 104 per cent and 1,021 per cent respectively.

“The half-year results show continued progress against the Company’s objective of building a global brand based on the health and digestive benefits of nutritional products containing only the A2 beta casein protein – free of the A1 protein,” said Managing Director Geoffrey Babidge.

“This has involved continuing to grow the established positions in fresh milk and infant formula in Australia while also investing in the key international growth initiatives in China, the United States and the United Kingdom.”

A2 markets its products around the fact that they contain only the a2 beta casein protein and the a1 protein.

The result contrasts with the performance of competitor Bellamy’s which has seen lower sales in China and falling profit.

New milk powder plant opens in South Australia

 

Premier Jay Weatherill yesterday opened the Blue Lake Dairy Group’s processing plant at Tantanoola in the South Australia’s South East.

The milk powder plant’s official opening is the first milestone in a two-stage expansion planned by the Chinese-owned company.

Stage one will enable the production of 20,000 tonnes of infant and adult formula, using powdered milk.

When full production at the milk plant starts in coming months, the number of employees will increase from 24 to 60.

Stage two is expected to involve a new $50 million factory to convert milk into powder and create an additional 90 jobs.

“We applaud the Blue Lake Dairy Group for its decision to invest in South Australia’s South East. It’s a decision that is expected to provide significant economic benefit to the economy of Millicent, Tantanoola and surrounding districts,” said Weatherill (pictured).

“The company’s investment demonstrates that South Australia’s regions have an abundance of unique, premium products and many opportunities for foreign investment, which creates local jobs.”

This is particularly the case in the South East which continues to play a big role in driving our State’s economy, contributing $3.6 billion in gross regional product in industries such as forestry, beef and dairy cattle, lucerne seed production and rock lobsters.

Wang Xin Xiang, Managing Director, Blue Lake Dairy Group said the company was pleased to invest in South Australia and thanked the State Government as well as Wattle Range Council for their support.

“The work performed by local contractors engaged on the project has been very professional and of excellent standard and we thank them for their efforts in making our new facility state of the art,” he said.

Murray Goulburn appoints new independent non-executive director

Dairy processor Murray Goulburn (MG) has announced Mark Clark will join the Board as an independent non-executive director.

Clark, who replaces the retiring Peter Hawkins, has extensive Board and senior management experience, including directorships with companies operating in the fast-moving consumer goods (FMCG), retail and consumer markets in Asia, Australia and Europe.

He spent more than 30 years with Coca-Cola Amatil, and held the positions of Managing Director Australasia and President of Coca-Cola Bottlers in Korea.

Murray Goulburn also announced the resignation of Chief Operating Officer and Company Secretary, Fiona Smith.

The co-operative is still recovering from the turmoil surrounding its decision seven months ago to retrospectively cut its farmgate milk price and associated financial and legal problems. Last week, Forensic accounting company, Morris Forensic alleged MG may have overstated its earnings and even lost money in the last financial year.

Dairies finding new “whey” of turning waste into profit

Dairies are continuously striving to maximise efficiencies and eliminate waste. For those plants producing cheese, there is a profitable method available for turning whey, a cheese by-product, into a significant revenue stream.

Historically, cheese processors would discard whey by transporting it off-site where to be dried by other companies or used as cattle feed, or in some cases drain it to an effluent treatment plant (ETP) or city municipality.

These options would come at significant transport or disposal costs, negatively impact the environment and operating margins.

With its technology portfolio and spray drying process expertise SPX Flow has helped many of these cheese producers upgrade their facilities to produce whey powder, whey protein isolate powder, non-caking whey powder, non-caking permeate powder and lactose powder.

Recently, the company was awarded contracts to design and construct new plants in Lithuania to produce whey powder and non-caking permeate powder and in France a high yield lactose powder plant. This lactose plant can provide a 20 per cent yield improvement compared to traditional processes. Other projects previously commissioned in South America, Scandinavia and Germany are running successfully and helping to establish new global standards in this area.

This lactose process requires specific knowledge of the heat and hold process to elongate evaporator runs as well as key technology used in the crystallisation process. This specialised process knowledge and equipment offered by the company brings advantages including higher product quality, whiter colour, free flowing and heat stable powders resulting in:

  • Consistently higher quality grade product that can be sold at higher prices
  • Ability to produce larger output from a single process plant
  • Very hygienic design compared to alternatives in the market
  • Significant operating margin improvements driven by yields

The company’s Drying and Liquid processing technologies provide  customers with reliable and optimised designs to help them achieve cost efficient solutions in today’s highly competitive dairy market.

World dairy trade faces strong headwinds

The trade in dairy products has suffered a number of massive blows in the last three years and is set to continue face headwinds going forward, according to a new report.

According to Rabobank’s “Strong Headwinds Weigh on Trade Growth”, the Russian trade embargo, the slowing of demand growth from China, the impact of low oil prices on demand from oil exporting countries and the strengthening of the US dollar have all had an impact on the demand for imports.

The expansion of production surrounding the removal of production quotas in Europe added to the pain and resulted in a period of extremely low world prices.

“And when we look forward”, said Kevin Bellamy, Global Strategist Dairy at Rabobank. “We see that none of these issues has been resolved. The Russian ban will be in place at least until 2017.

“Demand from China will continue to grow but at a slower rate, oil prices are forecast to remain at around the USD 50 per barrel mark, and the dollar is forecast to maintain its high value against other currencies. As a result, dairy trade is likely to grow at a slower rate than in recent years, driven more by population growth than per capita consumption increases.”

Influencing factors

Luckily, this comes at a time when further rapid expansion of export volumes would be more difficult, with further New Zealand expansion limited by land availability, Europe stabilising after milk quota removal, and the US export ambitions limited by domestic demand growth and the strong US dollar.

Dairy trade is also likely to remain dominated by regional rather than global routes with free trade agreements significantly influencing volumes. The exception will be Asia which will continue to be a highly competitive battle ground for exporters from around the globe. All of this must be overlaid with the potential for the renegotiation or cancellation of trade agreements following the US election results.

Struggles ahead

Much has changed since the last dairy trade map was drawn up three years ago. In 2015, the growth in trade was a meagre 0.3% more than 2014. In the next three years, growth in dairy trade will decrease slightly, due to the strong US dollar, low oil prices, the Russian trade embargo and slowing Chinese growth.

China will find a ‘new norm’, which is likely to mean lower volume growth but more focus on value. This will mean that while price volatility is likely to continue, long-run average price increases are likely to be limited. However, at a time of weaker global demand there are also issues weighing on the growth of export surpluses.

The strong US dollar and healthy domestic demand growth will mean that the US is less willing to compete in global dairy markets. Despite even moderate US dollar prices transferring into farmgate prices—which incentivises milk production in other export regions due to currency factors—New Zealand production growth will struggle as land availability becomes a limiting factor and in Europe, once production levels have stabilised after the removal of milk quotas, there is no preparation for ‘further’ strategic expansion which would require new land, infrastructure, and processing investment.

Uncertain times

 But perhaps even more than in recent years we live in uncertain times where the new US administration, uncertain Russian relations, uncertainty in the Middle East, Chinese economic performance, Brexit, and the fate of TPP and TTIP can all have a major effect on dairy trade development.

 

Asian milk demand growing but competition strong for exporters

Asian demand for Australian milk is continuing to grow but export margins have been squeezed and could potentially tighten further, according to new research.

The report, Liquid milk exports to Asia – avoiding the crush, by agribusiness banking specialist Rabobank, says competition in Asian markets will remain fiercely competitive as both international and local brands fight for market share and consumer spend.

Report author, Rabobank senior dairy analyst Michael Harvey (pictured below) says the automatic premium that international brands had historically received was unlikely to be repeated.

“It wasn’t long ago that being an imported brand automatically provided a retail price premium but that is no longer the case,” Harvey said.

“This has particular consequences for Australia and New Zealand given the previously alluring retail price premiums, combined with trade opportunities and relatively low capital outlays, which fuelled a period of significant investment in liquid milk processing capacity across Oceania.

“This increased capacity has been specifically geared towards Asia’s liquid milk markets, the short-term consequence of which has been a contribution to diminishing export margins.”

Michael__Harvey

The flood of investment in the regions has resulted in capacity almost doubling across Australia and New Zealand, with additional investment potentially in the pipeline.

This region’s dairy exporters are also competing with their European counterparts, many of which have large-scale and highly efficient processing plants complemented by a growing milk supply.

And while competition from Europe is continuing to squeeze the market, local Asian brands are providing additional competition.

Harvey says while the companies behind local brands have also been pressured by increased import competition, they are by no means looking to surrender.

However, despite some of these home advantages, the report says, longer-term a major hurdle for local brands will still be accessing enough locally produced milk in a cost- effective manner.

Strategies to ease the squeeze

While the Rabobank report is forecasting growing export volumes of liquid milk into Asia, margin growth is likely to be the bigger challenge.

“The key areas of focus that dairy export businesses will be looking at to increase their margins will include ensuring processing efficiency, improving their distribution chains and building a premium platform,” Harvey said.

While economies of scale will be important to remain competitive in the Asian liquid milk export market Mr Harvey says developing a premium platform will be essential for those companies wanting to increase their margins.

“For dairy exporters this is not just about product and packaging innovation, but also category expansion, R&D and behind-the-border support to better cater to changing consumer demands,” he said.

Image: daxueconsulting.com

Murray Goulburn to face dairy farmers at AGM

Dairy farmers still looking for answers six months after Murray Goulburn (MG) cut the amount it pays them will converge on Melbourne today for the co-operative’s annual general meeting.

In late April retrospectively cut its farm gate milk price, taking its suppliers completely by surprise and leaving them having to pay back much of what they had earned during that financial year.

Di Bowles, a farmer from Mead in northern Victoria will be at today’s meeting to find out what is happening.

“Murray Goulburn suppliers feel let down that they’re the last one to get any financial gain from the company,” she told the ABC.

“The shareholders are placed before the farmers.”

As AAP reports, both MG and other major supplier Fonterra Australia raised their farm gate prices yesterday. MG forecasts that it will pay $4.95 kg/MS for this full financial year, while Fonterra expects to pay $5.10 kg/MS.

According to Fonterra’s managing director Rene Dedoncker, strengthening global dairy prices were behind the company’s decision to raise the price.

“Although the global market remains volatile, since the beginning of the season, global milk supply has continued to decline significantly while demand has remained relatively stable,” she said.

Murray Goulburn cuts farmgate milk price, profit expectations

Dairy giant Murray Goulburn has cut both its profit expectations and expected closing farmgate milk price for this financial year because of wet weather and a subsequent drop in milk intake.

The company said in a statement that its forecast of $42 million for 2016/17 would be revised down and its expected closing farmgate milk price would fall from $4.88 per kilogram of milk solids to $4.70.

In addition, MG said it would suspend the milk supply support package, a loan scheme set up to assist dairy farmers struggling to repay the debts associated with its retrospective farmgate milk price cuts earlier this year.

“Until recently, there was confidence that spring rainfall was positioning the industry for an excellent season,” said Interim Chief Executive Officer, David Mallinson.

“However unexpected continual rainfall since mid-September following the step-up announcement on 13 September 2016 has created a major challenge for our suppliers and industry.

“Production across South Eastern Australia was down 10.7 percent in August, and this trend has continued to date. In particular, the North of Victoria has moved from drought like conditions in FY16 to severe wet conditions, with production from that region down 16.9 percent August year to date.”

Katter’s Australian Party wants fair milk price logo

Katter’s Australian Party MP Shane Knuth has tabled a private members bill into the Queensland Parliament to legislate for the introduction of fair milk price ‘logos’.

The aim is for voluntary region-specific logos to be placed on milk containers, giving consumers confidence the dairy farmer who produced that milk received a fair price.

As production costs vary across Queensland, the Bill identifies three dairy regions – north Queensland, central Queensland and south-east Queensland.

“This will make it very simple for the consumer – they can walk into the shop and immediately see which fresh milk produced in which region is fairly priced by looking for the logo,” Knuth (pictured) said in a statement.

The Bill provides for the setting of a minimum price to be paid to dairy farmers for the production of milk carrying a logo, which is a voluntary market mechanism processors can choose to incorporate into existing milk labels.

The legislation establishes the eligibility criteria and legal protection for logos and introduces offences for particular conduct to protect the logo integrity.

However, producers and processors would not be penalised if they chose to not adopt the logo.

Knuth stressed that the Bill did not enable regulation of the Queensland dairy industry.

As the ABC reports, both the Government and the Opposition indicated they have not yet decided if they will support the bill.

Both the Agriculture Minister Leanne Donaldson and the Opposition agriculture spokesman Dale Last will assess the merits of the bill after a parliamentary committee first assesses it.

Image: Facebook

 

Fonterra posts $807 million profit

New Zealand dairy giant Fonterra has announced a 65 per cent increase in net profit after tax to $807 million (NZ$834 million) for the financial year ended 31 July 2016.

The result came despite difficult market conditions, in particular the global oversupply of milk and a drop in demand (mainly from China and Russia).

The Co-operative is paying a Cash Payout of $4.30 for the 2016 season for a 100 per cent share-backed farmer, comprising a Farmgate Milk Price of $3.90 per kgMS and a dividend of 40 cents per share, on a total available for payout of $4.41.

Chairman John Wilson said in a statement that the 2015/16 season had been incredibly difficult for farmers, their families and rural communities, with global dairy prices at unsustainable levels.

“Our Co-operative has responded. We continued with the significant and necessary changes we began in the business over three years ago to support our strategy and its priorities, and worked hard to return every possible cent of value back to our farmers.

“Our business strategy is serving us well. We are moving more milk into higher-returning consumer and foodservice products while securing sustainable ingredients margins over the GlobalDairyTrade benchmarks, especially through speciality ingredients and service offerings.”

Murray Goulburn increases farmgate milk price

Dairy processor Murray Goulburn will increase the amount it pays suppliers for milk, though the amount will still be less than it costs those farmers to produce it.

The co-operative said in a statement that it will pay farmers $4.46kg/ms after application of the MSSP repayment, or an extra 15 cents per kg.

As the ABC notes, this is less than other processors, such as Fonterra (which is paying $4.75kg/ms), Bega ($5kg/ms) and Warrnambool Cheese and Butter ($4.80kg/ms).

In addition, MG has increased its forecast FY17 farmgate milk price to $4.88 kg/ms.

“Market conditions remain volatile however we have been able to capture enough of the current uplift to pass on both a step-up and modest increase in full year forecast to suppliers today,” said MG’s Interim Chief Executive Officer David Mallinson.

“Whilst international dairy markets have improved recently, they remain below historical average levels. Recent signs of recovery have come as global milk supply slows year-on-year. However, commodity prices and the strength of the Australian dollar remain a source of risk to current full year forecast.”

In April, MG retrospectively cut its farmgate price. Shocked farmers, who were not expecting the cut now owe the company money and many don’t expect to survive.

Farmers’ Fund milk to launch this week

Farmers’ Fund milk, a new brand which will raise money for Australian dairy farmers, will be launched in Victorian supermarkets this week.

AAP reports that the new brand will be made by Murray Goulburn (MG) under license from the Victorian Farmers Federation, and sold in Coles supermarkets.

The milk will sell for $2.50 per two litre container and 40 cents of that price will go to a fund to support struggling farmers. Individual farmers will be able to apply for grants up $20,000 with the first of these to be delivered in mid-October.

The move follows the April decisions of the two major dairy processors, MG as well as Fonterra to retrospectively cut farmgate milk prices. This has left many farmers in financial difficulty.

VFF President David Jochinke said the establishment of the Farmers’ Fund brand had strong potential to bridge the gap between primary producers and consumers.

“Many people have asked what they can do to help dairy farmers.  If they are not already buying branded milk, they can now buy Farmers’ Fund milk knowing that they are directly investing 40 cents straight into the Farmers’ Fund,” he said in a statement.

“Milk is our first product and is the start of something much greater.  There is a great opportunity for a farmer advocacy group like VFF to leverage the Farmers’ Fund brand to share with consumers the challenges farmers face and show how to support them all year round, not only in times of need.”

China suspends licence of Australian dairy processor

China has suspended the licence of the Camperdown Dairy Company, claiming the company’s products contain harmful bacteria.

The AFR reports that Chinese authorities claim traces of E.coli and staphylococcus bacteria were present in shipments of Camperdown’s fresh milk.

On top of the action taken against the company, Beijing has increased supervision of all dairy products coming into the country from Australia.

Camperdown Dairy General manager, Chris Melville denied the claim.

“If that type of bacteria had been found in our milk we would have been informed straight away and this is the first I’m hearing about it,” he told the AFR.

“We have test results to prove it is not true.”

Camperdown and its parent company has been on something of a high since July when Woolworths awarded Camperdown the right to supply milk to over 220 of its stores in Victoria.

At the time, the company’s management estimated the deal would help it double production.

Joyce confirms commitment to commodity milk price index

Deputy Prime Minister Barnaby Joyce chaired a symposium involving dairy farmers, processors and retailers in Melbourne today and again committed the Government to establishing a commodity milk price index.

Joyce said in a statement the index will cost up to $2 million to implement and that the meeting allowed stakeholders to express their views on its introduction.

The symposium comes in the decisions of major dairy processors, Murray Goulburn (MG) and Fonterra to retrospectively cut farmgate milk prices in April. As a result of the cuts, MG suppliers now owe the company an average of about $100,000 each.

“Recent events have shown there is a need for the industry to better balance risk along the dairy supply chain, especially when it comes to managing the effects of lower world prices,” Joyce said in a statement.

“Ultimately, I want to see improved farm gate returns for dairy farmers, an openness in milk price arrangements and fair and transparent milk supply contracts.

“This can only happen if there is buy-in from industry and a willingness from key stakeholders to hear each other out and develop solutions together.

Joyce also reiterated that the Government is assisting dairy farmers through its $579 million support package.

Murray Goulburn increases profit despite turmoil

Dairy co-operative Murray Goulburn has increased net profit by 61.2 per cent, despite a turbulent year in which it retrospectively cut its farmgate milk price.

MG’s net profit of $40.6m for the year to June 30 was in line with its most recent forecast of $39m-$42m. However, this was well below the profit forecast originally stated in its prospectus last year.

The co-operative’s revenue of $2.8 billion was down 3.3 percent compared to the previous twelve months.

“FY16 has been a challenging year for our co-operative. We faced an environment comprised of very challenging macro settings, including sustained low commodity prices, a volatile Australian dollar, changes in Chinese regulations, and difficult seasonal conditions across many of our key regions,” said MG’s interim Chief Executive Officer in a statement.

“This has placed our suppliers and Australian dairy farmers generally in a very difficult environment. The Board, MG’s management team, and I personally have also acknowledged to all our key stakeholders that MG’s FMP downgrade so late in the year added to the challenge of FY16. Today we reported a final FMP for FY16 of $4.80 per kgms – in line with our April revised earnings guidance.

“At the time of our revised earnings guidance in April, MG made the decision to support our suppliers for the remainder of the financial year through a Milk Supply Support Package (MSSP). At the close of the year, this support totalled $183 million, net of $7 million of early repayments. This delivered an average cash price for milk to our suppliers of $5.53 per kgms, after two consecutive years of FMP above $6.00 per kgms. The MSSP is larger than originally anticipated predominantly on account of incentives payable as a result of stronger than forecast milk receipts in May and June.”

As the ABC notes, MG suppliers who were shocked by the farmgate price cut in April now owe the company an average of about $100,000 each.

Science or Snake Oil: is A2 milk better for you than regular cow’s milk?

The new big thing hitting our supermarket shelves is “A2 milk”. Not only has this resulted in a great debate about whether it is any better for us than regular cow’s milk, but also a bitter feud over labelling between the big dairy companies in the Federal Court.

So what is A2?

Cow’s milk contains protein. The primary group of milk proteins are the caseins. A1 and A2 are the two primary types of beta-casein (beta-casein is one of the three major casein proteins) present in milk. They are simply genetic variants of one another that differ in structure by one amino acid.

The A1 protein produces beta-casomorphin-7 (BCM-7), which has been shown to alter gastrointestinal function (slowing down bowel movements from stomach to anus) and increase inflammation in the gut in animal studies.

Commonly, both A1 and A2 types of casein are expressed in cow’s milk in Europe, America, Australian and New Zealand, and hence the milk we find on our supermarket shelves.

The hype surrounding A2 milk came about after the patenting of a genetic test by the a2 Milk Company. The patent allows the company to determine what type of protein a cow produces in its milk and therefore license dairy farmers that prove their cows express only A2 protein in their milk (and not A1 protein). A2 milk is marketed by the a2 Milk Company to contain only the A2 type of beta-casein.

Initially, there were marketing claims that A1 proteins were harmful to our health, but a full review of the literature by the European Food Safety Authority (EFSA) in 2009 nullified such claims. Insufficient evidence exists to suggest A1 proteins have a negative effect on our health. The EFSA found no relationship between drinking milk with the A1 protein and non-communicable diseases such as type 1 diabetes, heart disease and autism, which is the focus of much of the hype.

After these findings were released to the public, the marketing focus shifted towards the A1 protein causing digestive discomfort and symptoms usually associated with lactose intolerance (for example, bloating and flatulance).

The first peer-reviewed human study was conducted with a small number of people (41). Only ten of the participants reported an intolerance to commercial cow’s milk. They compared differences after drinking milk containing only the A1 protein versus milk containing only the A2 protein (the milk on our supermarket shelves is usually a combination of the A1 and A2 milk proteins).

Interestingly, they found after drinking the milk containing A1 protein only, participants reported softer stools than when drinking the A2 milk. These results tend to go against the evidence in animal studies that the A1 protein slows down the movement of contents through the gastrointestinal system, which could be thought to bulk up stool content and hence result in harder stools.

The authors of this study suggested the softer stools might have been caused by an increase in gut inflammation caused by consumption of the A1 protein. Gut inflammation can cause malabsorption of fluids and nutrients and hence softer stools. However, the study found no difference in calprotectin (a measure of inflammation) between the two milk groups, so it failed to draw any sound conclusions.

This led to the second study conducted in humans, which was published this year. Unlike the previous study, it did use common commercial milk that contains both the A1 and A2 milk proteins and compared this to consuming milk containing only the A2 protein. It included only people (45 subjects) who self-reported an intolerance to cow’s milk.

Of the 45 subjects, 23 were diagnosed as lactose-intolerant. Someone who is intolerant to cow’s milk has an inability to digest lactose due to a deficiency in the lactase enzyme. But it is important to note lactose is present in both A1 milk and A2 milk.

The results showed A2 milk did not cause an increase in unpleasant digestive symptoms (for example, bloating and flatulence) usually associated with milk consumption in those who are lactose-intolerant. When cow’s milk containing both the A1 and A2 proteins was provided, there was an exacerbation of stomach upset. However, this would be expected for someone who is sensitive to dairy products, or lactose-intolerant.

The changes in inflammatory markers observed in this study need to be interpreted carefully. Despite some statistically significant changes between the two milk groups being noted, these aren’t necessarily clinically relevant and therefore do need further investigation in a much larger study with a greater sample size.

So is A2 worth it?

For those who do not experience any problems with milk consumption, there is no evidence to suggest any benefit in having A2 milk over the common consumed commercial milk, which contains both the A1 and A2 proteins. For less than half the price per litre, the latter would be the favoured option.

For those who self-report an intolerance to milk or are lactose-intolerant, A2 milk may be a suitable selection to prevent commonly reported stomach upset complaints, but so too is lactose-free milk. Lactose-free milk does not contain lactose, which is the naturally occurring sugar that causes the gastrointestinal problems in the lactose-intolerant. Consequently, what is needed is a study comparing the effects of lactose-free milk versus A2 milk in those who are lactose-intolerant.

Most importantly, longer-term studies with larger sample sizes are needed, as both of the studies conducted in humans to date have been conducted with small numbers over short durations.

The most important thing is that we don’t exclude milk products from the diet, as dairy is a rich source of calcium that is readily bio-available (meaning we can absorb the majority of it from this food source). Calcium is essential for the prevention of osteoporosis (brittle or weak bones) and an adult should aim for three dairy serves per day.

The Conversation

Nicholas Fuller, Research Fellow, Clinical Trials Development & Analysis, University of Sydney

This article was originally published on The Conversation. Read the original article.