mma update, page-32

What might generate excitement in the dairy industry? The following, I’d say..

...all the normal indicators (show) an excellent improvement ie yields of milk, fat and protein and the consequential lowering of SCC... increasing fertility means the farmer saves money on repeated AI, and gets his cows back into milk far quicker (1)

Happier, healthier, more fertile cows and more natural farming practices are obviously desirable, but key interest will be in the value proposition for dairy farmers. The dairy farmer seeking to improve the bottom line has three options – increase production, increase price or decrease costs. The Udder-Mate natural additive(s), as described above, would seem to be a winner on all three counts.

INCREASED PRODUCTION

• TPM used in the additive makes supplemented vitamins and minerals more bioavailable and improved nutrition leads to improved milk yields.

• Increased somatic cell count is associated with decreased milk production. Reducing SCC, as Udder-Mate is said to do, will therefore increase milk yield.

• Improved fertility means cows come back into milk faster, which means further improvements in yield.


INCREASED PRICES

• Bulk milk prices are adjusted for milk fat and protein levels. Higher fat and protein levels command a higher price.

• Quality incentives are paid for lower somatic cell count (SCC) and bacterial Standard Plate Count (SPC). (2) (This seems to be the case for the US and the EU. Australia appears to have several pricing methods.)

REDUCED COSTS

• Reduced cost in antibiotic treatment.

• Reduced artificial insemination costs.


Of course the question remains, if more milk of a higher quality can be produced, is there a market for it and are dairy farmers interested? Recent higher farmgate prices are leading to increased confidence in the Australian dairy industry. A recent survey reported 73 percent of farmers surveyed were positive about the industry’s future and that 40 percent were considering farm investment. Some within the industry believe that a great opportunity for Australian dairy lies in the potential to export to Asia frozen milk in point of sale retail packaging. New technology now means milk can be rapidly frozen, shipped at minus 18 degrees centigrade, defrosted without separating and then sold with a 14 day shelf life. (4) When milk retails for $4.25 per litre in Shanghai, versus $1 per litre in Australia, the sums for exporting frozen fresh milk might just add up.(5)

Finally, what might generate excitement in POH shareholders? What MMA is proposing is near-term, this is big market and this is JV. Udder-Mate is already in commercial production, an Australian media release is anticipated before the end of this year and licensing well beyond Australian and New Zealand shores would seem, in my opinion, to be inevitable.


(1) Post 9924837

(2)http://extension.psu.edu/animals/dairy/health/nutrition/nutrition-and-feeding/diet-formulation-and-evaluation/milk-components-understanding-the-causes-and-importance-of-milk-fat-and-protein-variation-in-your-dairy-herd-1

(3) http://www.foodmag.com.au/news/higher-farmgate-prices-lead-to-increased-dairy-con

(4) http://www.foodmag.com.au/news/dairy-could-be-australia-s-next-iron-ore-dairy-con

(5)http://adf.farmonline.com.au/news/magazine/industry-news/general/why-an-fta-is-vital-to-dairy/2674859.aspx