$100 stock, page-72

Arms, I have read the vast majority of Woodford’s articles, and all of the a2 related ones. Since you keep referrring me to read them along with questioning my understanding of business or the company I feel it’s only appropriate to school you now.

Woodford has mentioned a few times that super herds could separate a2 / a1 cows in a matter of a week or two - it’s not rocket science. What he refers to as being difficult is herd conversion through breeding (or purchasing) a2 cows - because it is a lengthy process (and he often refers to the conversion on a national level, not single farms).

Fonterra do not own the herds you are correct, however you are wrong about the farm gate pricing. A2 (Nathan I think it was) is on record saying that Fonterra farmers supplying a2 milk will receive the same payout as Synlait suppliers do - so plenty of incentive to seperate / convert.

As for the cost to test cows for the a2/a2 gene - it is about $20-30 per head, which is minimal considering the premium payout for the product. There are some giant herds in NZ and if Fonterra decided it wanted a large a2 milk pool in a hurry it could choose just a handful and probably dwarf Synlait supply. Subsidies wouldn’t be an issue at all, considering the better margins.

Also, a2 own the rights to FNP’s a2 milk pool due to the use of a2’s IP. If FNP were to cut ties with a2, they would not be able to market their own a2 products - the could only sell it as regular milk. Their is no major risk there, other than losing a supplier (which Fonterra could easily replace).

If you want I can keep going?