Sheep milk industry can earn billions for New Zealand

07-Jan-2016 - Last updated on 07-Jan-2016 at 13:31 GMT

There is potential for a multi-billion dollar New Zealand sheep dairy industry

A multi-billion dollar industry in sheep milk is available to New Zealand farmers, if they can be convinced of the opportunity, and if they work together.

This is according to post-graduate student Isobel Lees, currently studying dairy sheep in Grenoble, France at the European University. Lees obtained a veterinary degree at Massey University, in Palmerston North, New Zealand, and is currently using her background to study what is already a lucrative and well-established industry in France.

While not on the same scale as the French industry, sheep milk is also of economic importance in the Middle East, and Lees told DairyReporter that it’s also taking off in the US, Spain and Italy.

Industry needs collaboration

An industry already exists in New Zealand, with six producers led by Blue River Dairy, in Southland, which has 20,000 ewes. There are other establishment with a few thousand ewes, down to flocks of about 70, Lees said.

“There are varying scales, but huge potential,” Lees added.

Collaborative approach needed

First, however, the farmers may need convincing, and to get together.

“I was reading some of the research, and saw the opportunity. There have been a lot of claims about huge potential, but I wanted to see if we could make it into an internationally competitive industry, or were we just going to try and form a little niche market in New Zealand? Farmers were reading it, but it wasn’t grabbing them enough to want to change to sheep dairy.

“I wanted to talk about how we were going to establish a sheep dairy industry. New Zealand has over 30 million sheep, and we’re a world leader in dairy production, but how do we make it globally competitive? What do we need to first get it off the ground, and what do we need to make it distinctive and get a competitive advantage?

“We don’t have the numbers of critical mass for productivity, and get market relationships, we don’t have the expertise like France does, so we need to work on market relationships and collaboration within the industry. Those are what we need to be able to compete.”

Lees said that to be distinctive, New Zealand’s existing agricultural-based research and innovations are a good foundation to build on, “and building on credence attributes - welfare, environmental stewardship and fair trade, the opportunities are there to forge a real premium product.”

sheep2 — Sheep dairy exists in New Zealand, but not on the scale of France's industry

Avoid relying on reputation

“I think we need to be careful not to be too reliant on our reputation. We’ve benefited hugely from the clean green image we portray, which we definitely have, but we’re not the only ones that have it any more. Ireland is investing a lot more than we do in marketing, and we can’t rely on that in the future. We need to keep on top of [our reputation], building on innovations and keeping our reputation, only takes a couple of scares or competitors to lose our competitive advantage,” she added.

“We need to convince farmers in the sheep dairy community to collaborate and work together, and that would convince more farmers to join and that would get a critical mass. We need a concerted marketing effort. I think sometimes in the past, we’ve let ourselves down by focusing on building production facilities and on-farm innovations and technology but not really having the markets there to secure it, and secure premium prices and get stability.”

Adding value to milk

There are other ways the sheep milk industry could take off, Lees noted.

“We need to look at innovation, some of the unique properties of sheep milk, and look at maybe a sports drink, or some of the other unique New Zealand products like Manuka honey, or green mussel extract, which has anti-inflammatory properties. Imagine if we could get it sponsored by someone like the All Blacks, that would be huge! But they need to be validated by science.

“It needs to be a bit more like the dairy industry, but then there are lessons to be learned from that, they are probably over-reliant on one market. It’s really good that we can target different markets, but to get it off the ground, it has to work with collaboration, maybe with a farmer cooperative, like Fonterra.”

In France, there are 1.6m dairy ewes, producing more than 250m litres of milk a year, but there are still opportunities for New Zealand’s sheep milk products to grow and succeed as a successful niche industry, and Lees feels that it’s probably going to mean promoting the products initially in Asia and perhaps the US.