Guy Trafford is concerned the sheep milk industry will be set back by a new milk dryer sited in the wrong province, far away from major sheep flocks that could use it. Public money is involved in this blunder

By Guy Trafford*

An interesting article was recently published this week revealing that Food Waikato is planning on establishing a second powder drier.

Budgeted at $45 mln this is on top of the $11 mln spent on the current one (2013) and targeting the Sheep Dairy industry.

Several things popped into mind reading this, the first was why Waikato?

If you include King Country, Coromandel and Counties you get a paltry 1.6 million (in total) sheep. Compare this to Manawatu/Wanganui, 5.5 million or Hawkes Bay over 3 million and Canterbury over 4.5 million.

Why are there no sheep in the Waikato region? It’s not suitable. Primarily facial eczema is the problem, it is the scourge of the sheep industry in warmer climes and takes a huge toll on animal health and production.

The article states that funding is coming from Food Waikato ($1.4 mln) with the rest from “debt and dryer users making up the balance”. Given that a major user of the existing dryer is Spring Dairy a company owned jointly by Landcorp Farming and the SLC Group and they were the recipients of a generous $12.46 mln ‘grant’ from Government (MPI) in August 2016 the question needs asking: how much of this money is being devoted to this dryer venture.

In fact more than that, how sensible is this venture at all?

The MPI grant has a comprehensive list of outcomes (logic model) that were attached to it which include developing a “sustainable route to market for NZ sheep milk products” and “Supplier farmer uptake of a proven, repeatable NZ farming system capable of economically viable milk volumes, high animal welfare, positive regional social impact and low environmental impact” and “maximise NZ advantages”.

The reason these parts of the “logic model” have been highlighted is that the current plans of Spring Dairy appear to run totally counter to this.

Current plans are to move the Spring Dairy Taupo operation on to lease land near Cambridge and create a totally cut and carry operation mimicking the NZ Dairy Goat Co-op. How this meets the requirements of a sustainable proven sheep farming system that provides positive regional development and maximises NZ advantages is highly questionable.

A stones throw from Auckland and walking away from NZ’s successful style of pastoral farming by adding considerable costs and infrastructure to farmers in a region with very limited sheep numbers, especially when there are regions in both Islands far more suited to sheep systems appears on the face of it lunacy.

If sheep dairy could be shown as negatively impacting upon the environment or there were other compelling reasons to house sheep then perhaps there could be an argument. But to ‘encourage’ sheep dairying in a region alien to sheep and where even most cow dairy farmers don’t see a need to build expensive dairy barns has to be questionable especially when other regions could ramp up sheep dairy production far easier and faster and are only being held back by the lack of a processor.

So dryer users please think seriously about this decision, the last thing NZ needs is another white elephant created.

Sheep dairying in itself should have a great future, however these plans don’t appear to be helping it.


Guy Trafford is a lecturer in Farm Management at Lincoln University. He is also the rural editor at interest.co.nz.

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10 Comments

Could it be to do with labour and resources in both building and running the plant.

OCD's Horotui plant is due to start processing milk in Spring 2018

https://www.stuff.co.nz/business/farming/agribusiness/92004194/open-coun...

Meaning there's a whole specialised construction crew about to finish up.

Also once complete and being in the middle of dairy country surrounded by a handful of Fonterra and OCD factories, the skilled staff available to run the place is immense.

It may be a good location for the plumbing - but there are no sheep ! and given the disease issue, unlikely to be.

Better to ask if sheep powder can become a valuable niche or just another commodity. The good thing about dryers is they can handle peaks well and you can store the stuff.

For some reason we expect Landcorp to be inventive and creative, which is big ask for a government corporation. A step to far me thinks.

Facial eczema would not be an issue if farms were to replicate goat operations and be 100% barned and fed cut and carry, and or TMR (total mix ration). Mowers can be raised to avoid eczema spores.
However, costs would likely make such operations unviable given current poor production of NZ dairy sheep genetics.
Agree with Guy, building the drier in a region like Manawatu would have far greater potential to create a viable industry. Land is far less overvalued, less prevalent eczema issues allowing options for lower cost outdoor grazing, abundance of sheep/farmers that would jump at the chance to participate in a sustainable new growth industry.

Landcorp are milking 4000 east Friesian sheep on the Plateau somewhere.

http://www.springsheepnz.com/

Lacaune sheep have been imported into NZ which will see a significant increase in production Per head, it is the predominant breed of sheep used for Roquefort cheese production in France.

Personally I think it should be lead by the private sector but for some reason we expect Landcorp to be a leader but after the Wairaiki pastoral flop, its a wonder.

https://www.mpi.govt.nz/news-and-resources/media-releases/sheep-milk-ind...

Spring Sheep Milk Co Chief Executive Scottie Chapman says with PGP support, sheep milk represents a unique opportunity for New Zealand to build a high-value sheep milk industry. Spring Sheep Milk Co is a 50/50 partnership between Landcorp and a number of New Zealand investors through SLC Ventures LP.

Meanwhile Maui Milk has bred the sheep industry equivalent of the kiwi cross cow - called Southern Cross.
https://www.stuff.co.nz/business/farming/100764165/maui-milk-develop-wor...

https://www.mauimilk.co.nz/milk-suppliers/

CO, wouldn't they be genetically unstable? I've always been taught that it's takes along time to create a new breed for this reason. Those East Friesians are weak shitty sheep, from a lamb fatteners perspective.
I had a friend who milked goats but ended up inside due to parasite problems, then when Fonterra purchased Kapiti he got screwed and gave up.

Are you thinking of making the change?

No change Aj. Helping out at local dog trials is as close as the MOTH is ever likely to come to working with sheep. ;-)

I had a good East Friesian line a few years back Aj. Did my best lamb weights ever. Got $172 dollars once in december for the early boys. However as mothers they drove me batty. They would regularly have 4 or 5 lambs. And if you ever felt the need to rescue some of these multiples and went into their paddock they would all dump their lambs and bunch up in a mob. Mayhem. I remember one day finding a ewe with six little tots. For the life of me I couldnt figure out if they really all belonged to her. Not another candidate in sight. I learnt to leave them to it. And breed back to a coopworth. I had a fair few that lived to 8 to 10 years. I still have quite a fondness for them.

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.

So Guy Trafford commnents aren't surprising. Of course, Guy is no armchair critic of sheep dairying nor distant academic observer. He and partner Sue have built a niche sheep milk operation at Charring Cross in Canterbury and in their day jobs have worked hard to encourage students to consider Sheep Milking as a new growth industry that address some of the big bovine dairy’s key challenges. But milking sheep in the Waikato is not ‘lunacy’, because other regions had more sheep and are were more suited to ‘sheep systems’, and neither is a sheep milk dryer in the Waikato likely to become a ‘white elephant’. In my view, his claims and conclusions are mostly wrong.

Firstly, 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 higher value milk products from expensive land, the pressure to diverify 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 new entrant 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. Of course from a distance this might seem bizarre. But up close, milking sheep and making high value nutritional powders from that milk makes a lot of economic, environmental and political sense in the Waikato.

Of course other regions are also looking to produce higher value returns from agricultural land, and are also facing envirnomental constraints. Canterbury being the exemplar here. And Guy is right to claim that there is inequality of access to sheep milk drying facilities around the country. The Government-owned Food Innovation Network which is designed to take foods firms from start up to full production, has just one production scale milk dryer, and its 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. Afterall, 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 non-bovine milk products. Nowadays any trip to a supermarket here or offshore proves this point. But only in some alternative universe can we imagine the 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, market-focused 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. Chinese-owned Blue River has been going spectaularly well. In the last year it increased revenue by over 450 percent and was named in the the top 10 in Deliotte’s 2017 Fast 50 company survey. Up the road at Gore is 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 of the 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 sheep milk 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 straight forward: 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 probably needs to start working with offshore consumers, retailers and importers to develop sheep milk products. In the north, both Spring Sheep and Maui Milk have done some of the hard yards in their target markets and from this are now confident that they can build supply to meet this demand.

But beyond regional inequalities, Guy issue with Spring Sheep Milk Co doesn't ring true.

Under the PGP objectives, Spring Sheep is reguired to develop a ‘sustainable route to market for NZ sheep milk products’. Guy’s claim is that Spring Sheep is out of step with this objective by investing in the dryer, by moving its sheep dairying from the Taupo region to Cambridge, and by opting for a totally indoor, goat milking type cut and carry farming system. The problem is that each of these claims is mostly incorrect. For one thing processing sheep milk is not included in the PGP. In other words the Government investment is to be spent on market and farm development.

As for moving from Taupo to Cambridge and opting for a fully indoor goat dairy-like system neither of these claims are correct. Spring Sheep’s 3500 ewe milking operation at Taupo with its double 24-aside milking parlour and two enormous covered feed areas all set on 300 or so hectares of Landcorp’s leased Waireikei Estate will continue producing milk as it has done for the last two seasons. What it is moving however, is a selection of Spring Sheep’s ewes to the new Cambridge demonstration farm where trial work will continue on developing the most effective hybrid indoor-outdoor farm system.

Initial trials suggest that about half time indoors and half outdoors produces the best results. Spring Sheep business manager Thomas Macdonald told last year’s SheepMilkNZConference that not having sheep indoors 100 percent of time or in the paddock full time gives the best results. Over at Maui Milk, Peter Gatley told last week’s crowd that the barns were a tool for protecting the high value dairy sheep during inclement weather, lambing, Facial Eczema danger periods, and to even out the milking ewe’s access to a consistent, rich and nourishing diet. In short, neither Maui nor Spring Sheep sheep will be indoors fulltime.

It was a sunny but not overly hot day when we watched Maui’s staff milk the company’s 600 late season milkers on its new 64 bail rotary. Afterwards, the ewes happily heading out in the sunshine to a paddock of fresh lucerne. If the weather had been wet, humid or extremely hot, as it had been a few days earlier, they would not doubt have preferred to pass up the grass for the shade of a barn and some silage and nuts. Now, from afar it might look like Maui and Spring sheep are moving indoors. But up close, what they are doing is working out how to used barns to produce the best volume and quality of milk from the available conditions. This is not an sheep industry that is going to wait and hope that its prize workers make it back to the yards after a hard winter on the hill. The barns and mechanical feeding systems are tools that make it possible to even out the ups and downs in weather conditions and feed availabillity in ways that improve animal welfare and to work within the strict nutrient loading levels. From afar it probably looks like new sheep milk industry is throwing out the key traditions of NZ sheep industry. But up close this is a evolution in sheep farming that’s taking the best of what’s available, central plateau soils, rainfall and sunshine and reducing the impact of what’s less favourable.

Craig Prichard is Associate Professor with the School of Management at Massey University. He is co-organizer of the annual SheepMilkNZ Conference to be held in Palmerston North on March 12-13 (please visit: http://masseyblogs.ac.nz/sheepmilknz). Through Massey he is involved in multiple market, product and farm projects supporting the development of the sheep milk industry. He also milks a small flock of dairy sheep and is an very amateur sheep cheese, yoghurts and icecream maker.