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Protein boom: Whey protein prices almost triple in one year

Fuelled by the protein trend, prices of whey ingredients keep rising, leading processors to invest billions to increase supply – and creating risks for dairy market stability.

Demand for protein to add to packaged food and drink has led to an eye-watering rise in the price of whey protein isolate and concentrate.

At a glance:

• Prices for whey protein concentrate and isolate keep rising.
• Appetite suppressants and the ‘protein-first’ push across food and drink are key factors driving demand.
• Investment by dairy processors to increase whey protein supply could hurt cheese prices.

In the UK, The Guardian reported how concerns are mounting that a shortage of the ingredients is imminent. And it is a similar story of supply struggles in Europe and the US, where manufacturers are adding protein to everything from breakfast cereals and bagels to drinks and milk foams (like those added to coffees at Starbucks).

The Wall Street Journal reported how the “protein-in-everything craze|” has depleted supplies of whey protein concentrate, a powder long used to fortify sports drinks and infant formula.

Prices are up as supply is squeezed and demand shows no sign of waning.

“Protein is having a moment, and the dairy supply chain is feeling it,” noted agtech firm Ever.Ag in June.

Whey protein prices have almost tripled in a year

The DCA Market Intelligence benchmark for whey protein concentrate 80% (WPC80) reached €26,450 per tonne at the end of May. The benchmark for whey protein isolate 90% (WPI90) remains unchanged, but “the entire market for high whey proteins continues to move upward”, the analysts noted.

Less than a year ago, the WPC80 price stood at around €12,000 per tonne, while three or four years ago prices were still below €5,000 per tonne. Some believe the €30,000 per tonne mark is just around the corner; instant quality WPC80 has reached €29,000 in some sales already, according to reports.

Whey: Dairy by-product becomes a ‘strategic’ star ingredient

This boom is redefining value in the dairy supply chain, which comes with pros for protein production but cons for cheese potentially.

Traditionally considered a by-product of cheese production, whey is increasingly becoming a “strategic ingredient for the food industry”; and this shift is directly reflected in pricing, according to DCA dairy market analyst Wouter Baan.

“Whey is moving from a by-product to an ingredient with active demand. As a result, pricing is becoming less volume-driven and more influenced by functional applications,” he said.

Use of appetite suppressing medicines and the ‘protein-first’ push that has swept across supermarkets are increasing demand. So too is sports nutrition, which is now mainstream rather than niche.

GLP-1 has users hungry for more protein

“GLP-1 has changed who buys protein, and the whey market is still catching up”, noted Vesper, a commodity intelligence platform for dairy, in a social media post earlier in June.

People taking GLP-1 and similar medications are often advised to increase their protein consumption to help preserve muscle mass while losing weight.

Demand for high-protein fractions like WPI and WPC80 has for example grown larger and less seasonal, while supply has been slow to follow.

“The market conversation is changing,” explained Vesper dairy analyst Jasper Endlich. “The focus is less on whether protein demand will slow down and more on how companies can secure supply and adapt formulations in a structurally tighter protein market,” he added.

This shift has elevated whey from a low-value by-product of cheese production into one of the most profitable components of the milk stream.

Dairy processors are racing to keep up, but turning the tap on to increase the supply of whey protein will take time.

Dairy digs deep with huge investments; but at what cost?

In May, for example, FrieslandCampina announced an investment programme of more than €90m euros at its ingredients production network in the Netherlands.

This included technological upgrades across multiple production sites to support the manufacture of advanced protein products such as WPC80, ‘instantised’ whey proteins (those treated with emulsifiers), and microparticulated whey protein (MWP), which are used by food manufacturers in high‑protein drinks, bars and yoghurts.

Meanwhile, Tirlán, an Irish dairy cooperative, recently announced plans for a €126m investment in a state-of-the-art whey processing facility at its Ballyragget site in Kilkenny.

Fellow cooperative, Dairy Farmers of America (DFA), has invested in Greek yoghurt directly infused with whey protein isolates. In April, DFA launched the highest protein cottage cheese available on the US market (18g compared to 12g or 13g). Some 70% of Americans actively seek more proteins in their diet, the cooperative noted, with protein “a defining consumer priority in food”.

More than $11bn has been committed to 53 new or expanded US dairy processing facilities expected to come online by 2028, according to experts at Iowa State University.

Whey protein production boom could cause oversupply of cheese

For processors, the implications are significant. In some cases, cheese plants are now generating more revenue from whey than from cheese itself, the academics noted in an April update. As a result, manufacturers are expanding cheese production to capture higher whey returns, “fundamentally altering milk utilisation patterns”.

This brings potential rewards (favourable contracts going forward) but also “market risks”, they explained: “Because whey is co-produced with cheese, higher output could lead to a temporary oversupply of cheese, putting downward pressure on cheese prices even as whey values remain strong. Producers should be aware of the potential for short-term price volatility as markets adjust to increased capacity.”