Friday, March 29, 2024

Uncertainty about future markets

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After more than 10 years of colostrum pickups, many colostrum vats on farms are empty this spring, or, like the one at Gavin Russell’s farm on the Taieri, are used for calf milk.
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Fonterra announced late last year it was suspending all colostrum collection from its suppliers because of a drop in demand from overseas markets. It will tell farmers in December whether it will pick it up again in spring next year.

Russell, who milks about 620 Friesian cows, had been supplying Fonterra with colostrum for three years, earning about $10,000 a year from it.

“The first year we really just covered our set-up costs. Fonterra supplied the vat and the refrigeration but we had to do the pipework to it and the concrete pad and set up the electricity and wash,” he said.

“Fonterra has said we can keep the vat for the meantime and use it for calf milk as long as we have the red ‘not for collection’ sticker on it.”

He said he would supply colostrum again, if Fonterra changed its mind.

“It only took another ten to 15 minutes a day to do it and it was only for three or four weeks. And $10,000 is the price of a new motorbike so it’s worth it.

“We rear about 150 to 200 calves and they always got first priority. Fonterra only got what was left over.”

From the heady days when colostrum could reach $100,000 a tonne after the Sars virus outbreak in the early 2000s, international prices plummeted to $60,000-$70,000 two years ago and then to $30,000-$40,000 when the Chinese government banned colostrum as an ingredient in all infant and follow-on formulas for children under the age of four.

“Over the past 10 years demand had reduced by two-thirds and regulatory changes in overseas markets restricting its use has led to reduced demand and price,” Fonterra global regulatory manager Dianne Schumacher said.

“There has also been a steady decline in the number of interested farmers wanting to participate in the programme each year.”

Synlait is still picking up colostrum from some of its suppliers with a spokesman confirming the company manufactured a small volume for one customer for use in pharmaceuticals.

Westland is also in the market again this year but will only pick up colostrum from the first two milkings following the birth of the calf.

“This is to ensure that the colostrum is at optimum immunoglobulin levels for the quality and efficacy required by the market,” chief executive Rod Quin said.

‘And $10,000 is the price of a new motorbike so it’s worth it.’

He said prices varied for the product on the international market but it remained a valuable component of the range of products Westland made.

“It can command a premium price in some markets, reflecting the very high quality of product that Westland can supply.”

Bovine colostrum can be used as an ingredient in nutritional or health supplements to support the immune and gastrointestinal systems. Products containing colostrum include sports supplements, geriatric food supplements, and products designed to assist with supporting the immune system, growth, and healing.

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