Sheep dairying goes from baby steps to big steps
Sheep milking in New Zealand is set to grow, writes Craig Prichard from Massey University, who is heavily involved in the industry.
It has been a huge fortnight for New Zealand’s fledgling sheep dairy industry. Maui Milk, the Taupo-based Maori-chinese joint venture, officially opened its new 2000 sheep rotary milking shed and covered barns overlooking Lake Taupo’s western shores, and Waikato Innovation Park announced that it would be building a new $45m drier on its Hamilton site to cope with the growth in sheep-milk processing. The new drier will be part owned by Maui Milk and the region’s other large-scale sheep milk firm, Spring Sheep Milk Company.
Both events demonstrate firming confidence and commitment to sheep dairying in the northern end of the country, but inevitably some of those watching such developments from elsewhere might not be quite so impressed or upbeat. Canterbury sheep milk producer and Lincoln academic Guy Trafford is one such observer. In his Interest.co.nz column a week ago he questioned the sense of siting the new dryer in Hamilton and supporting sheep dairying in the Waikato.
Now Guy Trafford is no armchair critic of sheep dairying nor distant academic observer. He and partner Sue have built a niche sheep operation in Canterbury and in their day job they have worked hard to encourage students to consider sheep milking as a new growth industry that addresses some of the big bovine dairy’s key challenges. But despite this, Guy told his readers that milking sheep in the Waikato was a kind of ‘‘lunacy’’, because other regions had more sheep and were more suited to ‘‘sheep systems’’, and a sheep milk dryer in the Waikato might become a ‘‘white elephant’’. In my view, his claims and conclusions are mostly wrong.
First, Sheep dairying is a milk, not a sheep, industry. That might seem a semantic difference but strong forces draw sheep dairying to a milk region like the Waikato. The pressure to create highervalue milk products from expensive land, the pressure to diversify farm incomes and farm investment portfolios, and the pressure to respond to increasing environmental constraints on bovine dairying inevitably draw sheep dairying into that region.
But add to this the success of Dairy Goat Cooperative, which is now effectively closed to newentrant producers. Given the limited number of new supplier spots and the cost of shares, the expertise and proven success of the Food Innovation Network’s Waikato plant, as well as the tight connections between Waikato rural professionals and Spring Sheep and Maui Milk, and its easy to see how sheep dairying and its major piece of manufacturing plant winds up in this cow dairy heartland. This might seem bizarre. But up close, milking sheep and making high-value nutritional powders from that milk make a lot of economic, environmental and political sense in Waikato.
Of course other regions are also looking to produce higher-value returns from agricultural land, and are also facing environmental constraints, like Canterbury. And Guy is right to claim there is inequality of access to sheep-milk drying facilities around the country. The Government-owned Food Innovation Network, designed to take foods firms from startup to full production, has just one production-scale milk dryer, and it’s in the Waikato, when perhaps there should be one in each of the network’s four locations.
But the problem is not with the stainless steel. After all, NZ has enormous milk-drying capacity. Fonterra, for example, has the biggest milk dryer on the planet in Canterbury and lately new and bigger capacity has gone in up and down country. The challenge is not finding stainless steel, but convincing the companies that run such machines that high-value consumers are looking for nonbovine milk products. Nowadays, any trip to a supermarket proves this point. But only in some alternative universe can we imagine NZ’S largest company and owner of much of NZ’S drying capacity, processing anything other than cow milk. Sheep-milk processing power, however, is likely to be found in small, marketfocused and local companies that can share share manufacturing facilities, and foreign-owned dairy companies.
In Canterbury, Synlait has shown some interest in sheepmilk but currently has other products with greater market potential demanding its processing power. In Southland there is, of course, the Blue River Dairy’s dryer and manufacturing plant. Chineseowned Blue River has been going spectacularly well. In the last year it increased revenue by over 450 percent and was in the top 10 in Deloitte’s 2017 Fast 50 company survey. Up the road at Gore the new (mostly) Chinese-owned Matara Valley Milk Co factory has provision for processing sheep milk and may eventually do so as it ramps up. Further north it has been suggested that one of the other new Chinese processing plants might be open to discussions about sheep milk processing. But before such conversations can be had, much more work needs to go into sheepmilk product development and market testing.
Last year the Canterbury Development Corporation funded KPMG to produce an analysis of possible markets for the region’s sheep milk. Their report focused on yoghurts and icecream. The key issue was not processing capacity but developing a deep understanding of offshore markets, particularly in the Asian island economies.
Their advice was very straightforward: analyse markets first, test products against consumer engagement, and then build supply and processing capacity. The Canterbury Development Corporation did a nice job. But it can only go so far. In Canterbury and other regions, someone needs to start working with offshore consumers, retailers and importers.
Sheep dairying is farming milk not farming sheep. Craig Prichard