Fonterra has linked up with America's Dairy Management Inc (DMI) to fund research into whey protein.
The alliance aims to build the foundations for substantiating future health claims for marketing dairy products containing whey. It will establish a 'seed fund' to help US researchers get government funding for whey studies.
DMI is a non-profit organisation representing the American Dairy Association, National Dairy Council and the US Dairy Export Council.
Tom Gallagher, DMI chief executive, said: "This pre-competitive agreement between America's dairy producers and Fonterra creates a new approach to funding science that can lead the dairy industry to increased sales by showing dairy's competitive advantage over other protein-based products."
American dairy firms will initially fund studies on whey's effects on adults, while Fonterra will focus on sports nutrition and body composition.
Subsequent agreements are expected to lead to expanded research in nutrition and dairy product development. Potential nutrition research areas could include opportunities in cardiovascular health, immunology, bone health, and glucose control for diabetics, the two groups said.
The alliance also gives recognition to the common challenges faced by dairy firms as they look to tap into growing consumer demand around the world for healthier foods.
Whey, a by-product of cheese and casein production, has only been linked to health and nutritional benefits in the last few decades.
Dairy processors had always discarded it as useless, until researchers found it was rich in certain amino acids, including cysteine, which is thought to help maintain a healthy immune system. It is also cheap and relatively low in fat.
Some whey products such as high-end whey protein concentrate, whey protein hydrolysates and whey protein isolates are now enjoying growth rates as high as 20 per cent per year in the US and Europe.
Most activity has been in the sports nutrition and functional food sectors.