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Sheep milking doubles income in Waikato

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New sheep milking conversions in Waikato are delivering twice the per hectare income that the farmers used to earn from cows.
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Tom Woutersen | October 12, 2020 from GlobalHQ on Vimeo.

General manager of operations Peter Gatley says the new farms supplying Maui Milk this season are making around $14,000 a hectare, compared to $7000/ha a cow milking farm would typically earn.

“Income per hectare is a simple function of stocking rate, yield and payout,” he said.

“A ratio of six ewes per cow gives us about 17 ewes per hectare on Waikato dairy country. Our payout is $17 per kg of total solids, or about $3 per litre. Therefore, an average yield per ewe of 275 litres will deliver $14,000.”

He says revenue was only part of the equation, adding most of the expenditure such as electricity, fertiliser and breeding were easily calculated.

“We’re currently learning from our new conversions about the impact of other factors such as labour,” he said. 

“At this point, we certainly expect an improvement in the cash surplus compared to cow dairy, especially on smaller blocks in the 50 to 80ha range.”

Gatley says good genetics has been key to establishing the 275L production levels.

It involved securing genes from the French Lacaune breed, and the company has carried out over 10,000 inseminations with imported semen from progeny tested sires. 

He says this is the turning point for the industry.

“Most of our milk goes to Danone who have launched sheep milk infant formula, which is priced at the top of the market above A2 and goat milk products because it ticks every box,” he said.

“We need more milk and there’s a lot of interest, especially from small dairy farms who can do an easy conversion to make use of existing infrastructure. 

“They want improved profitability, a stable payout and environmental compliance. “Succession planning seems to feature strongly in their thinking too. We also see potential for equity partnerships and sharemilking.”

Waikato farmer Allan Browne owns one of the new sheep milking conversions.

He has both dairy cow and traditional sheep farming operations on land near Cambridge. This year he converted part of his property to milk sheep and so far, he is impressed.

“We got ewes from Maui Milk that are on track for 350 litres each and they’re only half Lacaune, with a quarter East Friesian and quarter Coopworth. 

“Even our first-cross hoggets by Lacaune rams out of Romneys are surprising us. It makes you wonder what is possible in future.”

The Brownes farm is one of several new conversions in Waikato, mostly involving simple retrofits of old herringbone cowsheds.

A lot has been learned from the new suppliers, which is helping refine financial modelling for future conversions. 

He says there are enough ewes available for several more conversions next year and are taking what they have learned to a series of meetings at Karapiro later this month to talk to farmers.

The meetings will be followed by a visit to the Brownes’ new conversion nearby.

Gatley says the company needed more milk to satisfy demand from Danone for its infant formula product.

There are 3800 dairy farms in Waikato, most having what is required to incorporate sheep milking.

“Even the smaller ones have sufficient scale for sheep milking. They have a lot of milking infrastructure suitable for dairy and sheep, such as topography, fertility, small paddocks, races, water and an effluent system,” he said. 

“You can milk your cows in autumn and have the ewes under way in spring.”

He says the environmental challenges bovine milking was facing to be compliant with new local and central government regulations coming in were also featuring strongly in the thinking among the owners of the newly converted sheep milking farms.

“Overseer calculations generally show sheep milking to have a considerably lighter footprint than cow dairy,” Gatley said.

“Some farmers see parallels with goat milking in terms of both financial and environmental issues, but sheep milking enables them to capitalise on their experience in pastoral farming, without the need to tie up capital in barns and machinery.”

He says shares are not required either, but supply rights will be assigned to protect the interests of early adopters.

“Succession planning is a big factor in some of the conversions, with the new generation invigorated by the opportunity to innovate and drive rapid productivity improvement while supplying an ultra-premium product category,” he said.

“Interest is also being expressed by those seeking a foot in the door via equity partnerships or sharemilking agreements.”

Details of Maui Milk information meetings and farm visits can be found on its website.

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