In the midst of concern about their future viability, government-owned farming giant Landcorp is diversifying into milking sheep.
Sheep milking could be a billion dollar industry in New Zealand in 10 years, according to an expert – if the right business plan is followed.
State-owned farmer Landcorp recently started milking on its first sheep dairy farm at its Wairakei Pastoral farm near Taupo, with more than 3500 sheep. Spring Sheep Dairy is a joint venture with agribusiness investment company SLC Group.
Landcorp spokesman Nick Gowland said it hoped to make an announcement about the new industry in November.
Massey University Institute of Veterinary, Animal and Biomedical Sciences senior lecturer Sam Peterson said New Zealand’s low milking sheep population would be “challenging”.
“Dairy ewe numbers will need to increase rapidly and a breeding and selection scheme will need to be developed rapidly to support a growing industry,” he said.
“At present there appears to be no limit to the market. John Ryrie, the manager of Landcorp’ new farm, told us at our conference in February, that in Britain, without advertising, there has been a 25 per cent increase in yoghurt and 14 per cent increase in raw milk sales year on year.”
In Britain, without advertising, there was a 25 per cent increase in sheep milk yoghurt and a 14 per cent increase in raw sheep milk sales year-on-year.
There was also strong demand for sheep dairy products in China.
Once New Zealanders accepted that sheep could be dairy animals, many people would consume their products without difficulty, he said.
“The current crisis in the cow dairy industry will help interest in sheep dairy; the phrase ‘dairy conversion’ will take on a new meaning.”
Benefits to sheep milking included good money – sheep milk sold at $2 a litre, and well-conditioned sheep could produce over 600 litres per season.
Sheep could also be farmed on marginal land, saving money, he said.
“Dairy sheep have a smaller environmental footprint producing far less manure than dairy cattle in a form that is easily assimilated into the pasture without significant leaching.”
Marketing consultant Lucy Griffiths, who released a report earlier this year outlining the market potential for sheep dairy, said it could be a billion dollar industry in 10 years.
But to achieve this, a number of key strategies would need to be taken within the first year, she said.
Profits were to be made, she said, but it would take courage and risk to set up new sheep milking farms. Producers would have to have a clear market organised prior to investing.
“There is very little information on how to milk sheep in New Zealand because it’s a new industry. But the key players have done their own research, and the Government has now invested in a major research project with AgResearch.”
Some of the best sheep dairy farms around the world were owned by corporate and business people, not traditional sheep farmers, she said.
“It is interesting to see that business people and entrepreneurs in New Zealand are investing in dairy.”
One of the benefits of sheep dairy farming was that farmers could generate three incomes from the one animal: milk, meat and wool.
In Israel, 45 per cent of sheep dairy farm income was from the milk.
“Add the milk to the lamb price and your ewe generates more revenue,” she said.
“We’ve got to continue to innovate in the agri industry to remain competitive and relevant to what the market wants and sheep dairy offers New Zealand great opportunities to adapt for the future.”