A2 sire demand on the rise: farmers move to future-proof herds...

A2 sire demand on the rise: farmers move to future-proof herds

PETER HUNT, The Weekly Times
November 28, 2018 12:00am

https://www.weeklytimesnow.com.au/a...s/news-story/121e49365cf1ff045730b40508364687

WHETHER the benefits are fact or fiction, the A2 wave sweeping through infant formula and fresh milk markets is leading to growing farmer demand for sires that exclusively carry this casein gene.
New Zealand and Australian dairy farmers are turning to A2/A2 sires to ensure they are at least partially prepared for any major shift in demand for the A1 protein-free milk, which proponents claim is more easily digestible.
New Zealand’s Livestock Improvement Corporation, which supplies 80 per cent of the nation’s dairy semen, said demand was on the rise with the frequency of the A2/A2 genotype reaching 53 per cent for crossbreeds, 66 per cent for Jerseys and 44 per cent for Holstein-Friesians earlier this year. In Australia, Semex production manager Tyson Shea said there was a definite trend to A2/A2 sires.
“If there’s two similar bulls and one carries the A2/A2, they’ll (farmers) take it,” he said.
That demand is set to grow after Fonterra struck a deal with the a2 Milk Company earlier this year to develop a pool of A2 dairy farms in New Zealand and Australia “to fast-track market growth and … create opportunity for our farmers to create additional value from their milk”.
But the big question for dairy farmers is whether there’s a long-term premium to be had from the A2 milk wave, or is it just a ripple?
Fonterra is looking to develop a2 Milk Company-branded cheese and butter, plus expand a2 milk powders.
But at this stage A2 demand is limited to high-margin infant formula and fresh milk markets, which absorb a minute share of the trans-Tasman milk production.
Just how small that share is can be seen in the fact that in 2017-18 the a2 Milk Company reported sales revenue from its a2 Platinum® infant formula in Australia and China “was $724.2 million, an increase of 84 per cent on the previous year”.
Yet over the same period the exclusive supplier and manufacturer of a2 Milk Company’s Platinum infant formula, Synlait, reported its milk purchases from farmers fell from 64.9 million kg of milk solids in 2016-17 to 60.7 million kgMS in 2017-18.
Synlait spokeswoman Sarah-Jane Bashford said the company would not reveal how much of its production went into a2 Milk’s Platinum infant formula, but did say it collected about 21.4 million kgMS of A2 milk from its suppliers in 2017-18.
The numbers reflect just how little milk goes into a2 Milk’s tins of infant formula, with packaging showing it contains about 10 per cent milk protein.
Dairy farmers on both sides of the Tasman need to be aware that the a2 Milk Company’s patents on two key testing methods have expired, opening the way for rivals to enter the market.
Both Freedom Foods and Nestle have entered the A2 market but are yet to pose a serious challenge to the a2 Milk Company’s dominance.