The mysteries of grass-fed milk

Here in New Zealand, we live the notion that milk from grass-fed cows is superior to milk from cows fed other rations. Supposedly it is better for health. And supposedly the cows are happier if they can dance around in the sunshine doing what comes naturally. And supposedly it makes us more cost-efficient than our international competitors.

There is an element of truth to all of the above notions. But more often than not there is lots of myth intertwined with truth. Here, I want to tease out what is truth, what is myth, what depends on specific context, and some things that are still unknown.

The whole-milk-powder conundrum

There was a time, long ago, when the New Zealand dairy industry was built around production of butter and cheese. In contrast, over time, and particularly the last 20 years, the New Zealand industry has become focused on large-scale spray drying of milk to produce commodity whole-milk powder.

The reason why New Zealand has become so focused on production of whole-milk powder is easy to explain. For most of the last 20 years, and given New Zealand’s focus on increasing production, together with seasonal production with its high peak-processing demand, then whole-milk powder is where the easy money lay.

The green grass of Taranaki

In early June, I made a quick trip to Taranaki to talk to the Rural Business Network, which is a mix of farmers and rural professionals. For me, the trip brought back many memories.
As a South Islander for much of my life, it was wonderful to see the lush green grass growing nicely even in winter, and to be reminded of the benefits of free-draining volcanic soils. And then to look up to snowclad Mt Taranaki, which was the very first mountain of any significance that I climbed while still a schoolboy.

Dairy and Mt Taranaki

Dutch cows graze below sea level

In late May, I was in Holland with colleagues from Calder Stewart as part of a self-education project on hybrid dairy systems. These systems involve 12-month production of milk from the combination of grazing and off-paddock systems.

One of the first lessons we learned is that many Dutch cows graze below sea level. The north-western half of Holland is almost totally below sea level apart from artificial man-made structures called polders. In these regions, the pastures lie three to five metres below sea level. There is an English saying that God made the earth, but the Dutch made Holland.

Synlait purchases strategic blending and canning assets

Synlait’s announcement today of the purchase of apparently distressed assets from the New Zealand Dairy Company puts another peg in the board strengthening Synlait’s pathway towards an integrated dairy value-chain. The purchase has relevance both to Synlait and its strategic partner The a2 Milk Company (ATM in New Zealand; A2M in Australia). The unstated key driver is exponential growth of demand for ‘a2 Platinum’ infant formula.

The purchase cost of the incomplete assets, which are adjacent to Auckland Airport,  is $33.2 million with additional expected costs of $23.3 million to make the plant operational by October 2017.

Learning from Tillamook dairy

This last week I have been in Tillamook, in Western Oregon. Together with three colleagues from Calder Stewart, I have been exploring the dairy systems here, to see what learnings we can bring back to New Zealand.

Tillamook is a high rainfall zone on the Pacific Coast and has much of the same feel about it as the West Coast of New Zealand.  It is one of the few places in the world where dairy cows can be grazed on perennial pastures, and using the same grass species as we use in New Zealand. The latitude is 45 degrees North, which is a latitudinal mirror image of Oamaru, Alexandra and South Westland.  But climatically, it Westland that is the best comparison.

Alternatives to dairy in New Zealand – the challenges are under-estimated

Readers of my articles will know that I believe we can find solutions to the multiple problems that face our New Zealand dairy industry. However, the current conventional wisdom within New Zealand’s dominating urban constituency is that there is no path ahead for dairy and that we therefore have to find alternatives. My key message here is that finding non-dairy alternatives will not be easy.

There is a clear logic as to why New Zealand has focused so much on dairy. Quite simply, it is the most efficient of the pastoral industries at turning grass into animal protein.  Economic factors have led inexorably to industry expansion, and for many it has paid off big-time.  This is despite the dairy downturn from 2014 through until recently.