How Clusters and Spray-Drying Are Reviving Thailand’s Dairy Cooperatives

In Thailand’s dairy belt, co-operators and policymakers are teaming up to turn seasonal surpluses into steady growth, tapping cutting-edge processing and cooperative clustering to fend off cheap imports and volatile feed costs.

What’s Driving the Dairy Revival

• Regional clusters are pooling resources across small co-ops

• Spray-drying at Wang Nam Yen unlocks 6,500 tonnes of powdered milk annually

• Quota realignment aims to smooth out 70,000-tonne gluts

Community Hubs Forge a Sustainable Path

Across the kingdom, more than 90 dairy cooperatives are being nudged into regional clusters to share chillers, feed mills and lab services. By grouping nearby operations—from Chiang Mai to Chai Prakan—farmers can slash transaction costs and negotiate bulk feed purchases together. This cooperative clustering not only gives smallholders better bargaining power but also creates local hubs equipped for pasteurisation, rebuffing concerns of oversupply and price collapses.

Tech Transfer at Wang Nam Yen

In Sa Kaeo’s Wang Nam Yen district, a lone spray-drying tower transforms surplus milk into high-grade powder that meets EU specs. The facility handles over 70,000 tonnes of raw milk each year, outputting roughly 6,500 tonnes of shelf-stable powder, plus UHT, cheese and OEM products for leading dairy brands. With on-site labs able to run somatic cell counts in under five minutes, the cooperative stands as a blueprint for what integrated production can achieve when public support aligns with private expertise.

Balancing the Books: Quotas and Seasonal Gluts

Rising feed prices and tariff-free imports from Australia and New Zealand have put pressure on domestic margins. To prevent the market from flooding during the rainy season, the government is reallocating production quotas—redirecting excess milk to clusters primed for pasteurised output. The Milk Board’s recent agreement channels roughly 108 tonnes per day into school-milk programmes, while the remainder finds its way to private processors for powder conversion, helping stabilise farm-gate prices.

Sealing the Deal: Quality-Driven Negotiations

Survival may hinge on contracts. Department officials are finalising a framework where quality bonuses reward farmers whose milk exceeds 3.8% fat, and cost-index formulas adjust prices quarterly to reflect feed and energy fluctuations. Private buyers are also pledging co-investment in cold-chain infrastructure, linking longer supply agreements with on-farm cooling tanks to ensure consistent bacterial counts.

Roadmap to 2027: National Strategy and Farmer Buy-In

Aligned with the 13th National Economic and Social Development Plan and the BCG Economy model, the dairy reform sets milestones: cluster mapping by mid-2026, two additional spray dryers by early 2027 and a blockchain-enabled quality ledger soon after. Yet officials acknowledge that technology and quotas mean little without farmer engagement. As one cooperative leader put it, “Cooling tanks and labs only work if we deliver top-notch milk from the herd.” The next six months will test whether Thailand’s dairy community can unite on cooperation rather than compete in isolation.