What we can do as holders and believers, page-4

It's great to have on-the-spot news from China about A2M and I join you in congratulating Tongleite for taking the initiative with Walmart.

It would be great if A2M could suddenly increase its output tenfold, including infant formula of course, but it just isn't possible for reasons I have referred to in various posts recently. The two main problems are the creation of A2 herds, which usually takes several years, and setting up processing facilities for IF (2-3 years and capital intensive unless you can find spare plant already available). That's why things are pretty stretched right now.

However, a2MC has indicated that next year it will crank up operations in its home market, New Zealand, where there is a big surplus of milk available and hundreds of farmers who have already been creating A2 herds and would jump at the chance to earn premiums for the supply of A2.

We don't know quite what the company plans to do on either side of the Tasman, but obviously it won't be standing still. However it would appear that its NZ manufacturer of infant formula, Synlait, probably can't greatly increase its IF production for atMC at this point. What atMC possibly can do (and I'm speculating here) is line up facilities capable of processing quite large amounts of A2 for export by air to China either as fresh or extended life milk. Certainly better than nothing as a first step.

It does seem a pity that a2MC can't entirely get around the timeline problem for creating new A2 herds, but at least we know it will be even harder for competitors to do it. Building up A2 herds will take time in all markets.