Friday, March 29, 2024

$30m PGP boost to sheep milkers

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A $31 million boost to sheep milking is a welcome injection to a growing industry, Maui Milk general manager Peter Gatley says.
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Sheep milking had a big future but there was still much to be learned, he said.

“Everywhere we look we see opportunity for improvement and lots of research is required to capitalise on those opportunities.

“There’s a lot of work to be done on the fundamentals of establishing the science. For instance, we know sheep milk is a substitute for cow milk intolerance but we don’t know why.

“We need to understand the science that underpins the benefits,” Gatley said.

The Government has agreed to take part in a new Primary Growth Partnership (PGP) between the Ministry for Primary Industries (MPI) and Spring Sheep Milk Co to develop a market driven, end-to-end value chain generating annual revenues of between $200m and $700m by 2030.

MPI would invest $12.56m in the programme with Spring Sheep investing $18.83m to make a total investment of $31.39m over six years.

Gately said Maui Milk already worked with Spring Sheep.

“We have an extremely positive relationship with them. We learn a lot from each other and as long as we maintain that collaborative relationship then, certainly, we see this PGP as very positive.”

Maui milked a flock of 4000 ewes, including hoggets, on the shores of Lake Taupo but by this time next year the business would have doubled.

It was in the process of converting a second farm that by the August 2017 lambing would bring a further 4000 ewes on stream.

Both flocks were East Friesian-based bloodlines augmented with some new blood from the Middle Eastern Awassi and the French Lacaune breeds.

While milking was a seasonal operation now, in line with lambing in spring, it would be possible to milk all year round, Gatley said.

“And if we want to supply liquid milk we would need to be milking all year round and that is entirely possible.”

In the Netherlands and Germany sheep were milked year-round in a two-year non-stop programme.

There was huge interest in sheep milking in NZ, he said.

“The world market is huge in terms of sheep milk, like a US$8 billion industry.”

He was not anticipating a billion-dollar sheep industry here in the next 10 years.

“But a business doesn’t have to be big to be successful.

“It is up to us to first prove we are getting a level of productivity and at the moment we are making huge strides but the new farm will bring in much improved operational systems to use as a template for others.”

It was planned to use the new farm for demonstrations.

Sheep milking would be a particularly useful option for farmers coming under strict environmental regulations.

“We are confident we can get productivity out of that (strictly regulated) land, better than any sheep and beef property.”

Earlier this year Chinese investors bought into Maui and that had not only given the Shanghai-based milk powder business guaranteed supply it had secured a market path for Maui.

Under the new ownership structure the Waituhi Kuratau Trust, the Turangi-based Maori land trust that owned Maui, now owned 40% with the rest held by four Chinese nationals.

Gately said the Chinese investment gave Maui direct market access complete with knowledge, culture, connections and networks, all things critical to get product to market.

“All agribusiness initiatives are only as strong as the weakest link in the chain and in the past, initiatives have failed through failure in the route to market,” Gatley said.

Spring Sheep chief executive Scottie Chapman said with PGP support, sheep milk represented a unique opportunity for NZ to build a high-value sheep-milk industry for growing international demand. 

“With the right approach, NZ is in an ideal position to develop the sheep milk products to meet this demand.”

Scottie Chapman

Spring Sheep Milk Co

Spring Sheep was a 50:50 partnership between Landcorp and a number of NZ investors through SLC Ventures LP.

“With the right approach, NZ is in an ideal position to develop the sheep milk products to meet this demand.

“Our PGP programme with MPI allows us to do that in a planned and systematic way so we create a high-value, sustainable industry from the get-go,” Chapman said.

To achieve a sheep milk industry delivering domestic and export returns at the upper range of $700m, NZ would need up to 55 farms run by farmers with specific sheep milking expertise.

“The current farming model in NZ won’t achieve this, which is why this joint investment is so critical,” Chapman said.

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