Spring Sheep Milk Co

Spring Sheep Milk Co is a marketing company focused on supplying high value products. It also owns a large sheep milking operation at Reporoa. Nick Hammond, the company’s chief operating officer, is also the project manager for Sheep – Horizon Three, a PGP project aimed at establishing a “market driven, high value, sustainable sheep dairying industry”.

Spring Sheep Milk Co is a JV between Landcorp and private investors through SLC Venture LP, a group with good marketing skills and connections in Asia. It was set up in 2015 as a marketing company, and its venture into sheep milking is the result of market research identifying strong demand for high value sheep milk products.

The PGP programme Sheep – Horizon Three is a six-year partnership between MPI and Spring Sheep Milk Co.   The aim is to invest over $30M between them to develop a market driven, end-to-end value chain generating annual revenues of between $200 million and $700 million by 2030. Amongst other things it involves improving genetics and developing farming systems that suit the NZ physical, social and economic environment and make the most of available infrastructure and feed crops.

Spring Sheep Milk Co’s purpose is to build a fully integrated New Zealand sheep milking model that can be expanded. It combines the farming strengths of Landcorp with the sales and marketing expertise of SLC Ventures. The result is a streamlined team that does everything from genetics to manufacturing new products and exports, according to Nick Hammond, the company‘s Chief Operating Officer.

“We have identified that there is great potential for sheep milk products in Asia. Many Asians are intolerant of bovine milk but don’t like the taste of goat milk. Sheep milk tastes better, is very digestible and has very good nutritional properties,” he says.

“Currently we produce three main products – one is a range of tablets that are a readily available source of calcium, the second is a probiotic milk drink exported as powder in tins and suitable for all ages, and the third product is Growing Up Milk Powder or GUMP, a stage 3 baby product. So for the first time for Asian markets we have milk products that are really good for you and taste great.”

The company milks just over 2000 ewes on 150 ha near Reporoa, most of it in lucerne, with a season running from August to March. Four fulltime staff and up to six seasonal staff are employed. There are two milking parlours under one roof with the capacity for milking between 800 – 1000 ewes per hour. Milk is processed in Hamilton into powder.

While there are several successful sheep milking farms of around this size in NZ, entry into the industry at this level is limited by the high capital requirement and few processing facilities. Also the genetics of NZ milking sheep are a limiting factor in terms of production, and more research is needed to optimise farm sizes and systems to suit the NZ environment. Sheep – Horizon Three is designed to find answers to these questions.

Nick Hammond says that NZ’s stock of East Friesian sheep can be traced back to a “trailer load” that were imported in the early 90s.

“These formed the entire backbone of the NZ dairy sheep genetic line so it has been a huge barrier to the industry expanding. We’ve measured their milk production over a year and it is low compared with the top lines in Europe that produce upwards of 600 litres per season,” he says.

“I'm not saying that's what we can achieve here but from a genetic elite perspective they are a completely different animal. We have some in NZ now and they will be ready for milking next season so it will be the first time we will be able to assess these high end European dairy sheep in under NZ conditions.”

The PGP programme also involves rethinking the farming model for New Zealand sheep milking. Currently all the exporters milk around 3000 sheep on very large sites, and that creates a very large economic barrier for New Zealanders to finance entry.

“We also think it is quite a challenging system to get to work, so we have been looking at doing pilot farm models milking 800 sheep on 40 ha sites,” says Nick.

“One option is to cut 40ha off an existing farm and make it into a stand-alone sheep milking unit. The other is taking an old dairy site that has become uneconomic and is now used for, say, heifer grazing rather than milking, and converting that to sheep dairy. That has attracted a lot of interest because it takes advantage of a million dollars worth of assets sitting there unused.”

“As the environmental and economic pressures fall on farms especially around the central North Island we are seeing a lot of these sites no longer viable for cow milking and so we see a really good opportunity for sheep milking conversions. We've got one pilot of each of those models starting this coming season.”

On the Reporoa farm all lambs are reared on finishing farms or feedlots. When the ewe lambs reach mating weights they are brought back into the milking flock. Ram lambs go through conventional production avenues. Thomas Macdonald, business manager for the company, says that the property has the size and flexibility to carry out many of the trials for the PGP programme.

“We’ve carried out a large-scale feeding trial where we split the 2000 sheep into four mobs of 500. One of was grazed outdoors day and night like a traditional dairy herd, and we measured its milk yield. We then had two mobs that grazed outdoors at night, one mob on lucerne and the other on ryegrass, but they spent the daytime indoors out of the heat,” says Thomas.

“The final mob we kept indoors 24/7 fed only the mixed ration diet. We put pedometers on all the sheep so we could measure how far they walked and we put activity monitors on them just to check out grazing behaviour and their daily activity. We also measured temperature, humidity, milk composition, cell count and milk volume to determine the best or most appropriate farm system for dairy sheep.”

“We now believe that at the start of lactation a total mixed ration diet is absolutely important. As the season progresses we can move into a hybrid model which is now showing favourable milk yields compared with the fully indoor regime. It seems that that outdoor access and access to New Zealand pastures as well as avoidance of daytime heat each contributes to higher milk yield and better quality. So the hybrid system is equal to or better than the fully indoor system and has lower labour costs because there is less feeding out.”

Thomas says they have worked with a nutrition expert to determine an optimum cost-effective diet for milking sheep – a mix that includes maize, barley, lucerne and peas. This has proved successful – last season they average yield per ewe was 120 litres in a 180-day lactation. This season they are on track to reach over 200 litres.

Nitrogen leaching is a problem on conventional dairy farms and is one of the reasons dairying has become an environmental concern. Measurements using 300 lysimeters underneath the Reporoa operation have so far shown at least a 30% reduction in nitrate leaching compared with traditional cow dairy farming.

Miscanthus is proving successful as bedding material for the housed sheep, and Thomas says that a substantial area has recently been planted in this species.

Through the PGP programme Spring Sheep Milk hopes to achieve orderly development of the industry so that boom and bust can be avoided. Encouraging smaller units to develop in clusters close to processors, use of existing dairy processing facilities where possible, freezing of milk for later processing, and securing markets for high value products are all part of the strategy to grow the industry. Initial supply contracts are to be in place by 2020 with a likely price of $2 per litre, which is equivalent to $12/KGMS.

Successful product development is something that Spring Sheep Milk has made a great start with. Last year its sheep milk probiotic product won both the Export Innovation Award and the Supreme Award at the New Zealand Food Awards.