Clinical trials are starting at Sydney's Centre for Digestive Disease on the use of New Zealand cow colostrum as a diet supplement for humans.

Colostrum is a fluid taken from the first five milkings of dairy cows that have given birth. Its immunoglobulins provide a wide range of health benefits, including some immunities for calves.

It is processed into products for the health supplement market, and in Australia is used as an immune system booster and to help the growth of lean muscle in athletes.

In New Zealand, the use of colostrum for human health products is an expanding industry, worth $30 million to $50 million a year, and likely to soar in value in the next few years.

Fonterra subsidiary Speciality Ingredients Group is building on work done by New Zealand Dairy Group which led to pilot trials that suggest colostrum products could relieve symptoms of gastric problems such as acute chronic bowel disease, irritable bowel syndrome and Crohn's disease.

An ethics committee has approved clinical trials under gastroenterologist Thomas Borody, said Charles Williams, international sales and marketing manager of Speciality Ingredients.

Big cosmetic companies had shown an interest in the "nutriceuticals" creams. There was also huge potential for "biotherapeutics" to be used as digestive aids, as an infant formula supplement for mothers who are unable to breast feed, and as a medical food to help treat specific diseases.

Much of the company's research has been in conjunction with Otago University.

About $1 million was spent by Dairy Group on research and development, and the Speciality Ingredients Group now had revenues of about $10 million a year, Mr Williams said.

Farmers contracted to supply the colostrum - under strict protocols and a grade system - were paid up to $1.20 a litre for the "first milk" in July and early August, which gave them early season cashflow.

Farmers registered to supply had to guarantee their own new calves would get at least two to three litres of colostrum, which was essential to create an immune system and to seal the gut.

Much of the product was exported to the United States, Southeast Asia, and recently to Europe. In Switzerland, it is made into digestive-aid capsules, tablets and energy bars.

- NZPA