Milking the happy cow image

The image of a healthy, happy cow grazing on a lush pasture is probably the first that comes to mind when thinking about Australia and New Zealand’s dairy products.

And, for the most part, that image is in line with reality.

Both countries have long enjoyed a high reputation for the quality and safety of their dairy products. Moderate climate, abundant grazelands and access to water mean pasture is available for cows to graze outside, which adds to the reputation of Australian and New Zealand dairy products as high in nutritional value.

This positive industry image bodes well for the two countries’ export markets. A study in 2020 confirmed that the positive perception around Australia’s ‘pure and natural farmlands’ is quite strong in major dairy consumer markets in Southeast Asia.1 Dairy is also the largest export sector in New Zealand, accounting for one in every three dollars New Zealand earns from the goods export trade.2

With both countries’ economies so reliant on dairy exports, food testing laboratories such as AsureQuality’s Auckland laboratory process millions of dairy samples – from raw and treated milk to powdered milk, butter, and cheese – each year to support New Zealand exporters and help them meet Overseas Market Access Requirements (OMARs) in their destination countries.

Michael Hodgson, Group Service Manager – Food Testing at AsureQuality, which conducts approximately 1.4 million dairy sample tests per year, says access to quality chemicals and laboratory consumables is essential to our business of supporting dairy exporters through fast and accurate testing services.

To read the full article, go here.

ACCC calls for regulatory reform to assist dairy farmers

The ACCC has released the final report arising from its dairy inquiry, which includes the key recommendation that a mandatory code of conduct be implemented to improve contracting practices between dairy processors and farmers.

The inquiry was initiated by Treasurer Scott Morrison in response to large and retrospective reductions in milk prices imposed by two major dairy processors in April 2016. The inquiry involved investigations, consultation and data analysis over a period of 18 months.

“A mandatory code of conduct would address problems arising from the large imbalance in bargaining power and information that exists between dairy farmers and processors,” ACCC Commissioner Mick Keogh said.

“Currently, processors can impose milk prices and other terms of milk supply contract terms that are heavily weighted in their favour. Some milk supply contracts also contain terms that restrict farmers’ ability to change processors for a better offer.

“These issues ultimately harm dairy production efficiency and reduce the effectiveness of competition between processors,” Keogh said.

The ACCC explored ways to address these concerns and found the existing provisions of the Competition and Consumer Act (2010), the dairy industry’s voluntary code of conduct, or a prescribed voluntary code would be inadequate.

“A mandatory code would improve the quality of information and price signals available to dairy farmers, enable fairer allocation of risk and enhance competition by removing switching barriers. While introducing a code won’t fully correct the bargaining power imbalance, it will reduce some of the negative consequences,” Keogh said.

Cows Might Fly – The Best Way to Predict The Future Is To Create It

A surprising take on the future of food by Wiley.

 Wiley has released a clip, Cows Might Fly, at Food and Grocery Australia 2018 hosted by the Australian Food and Grocery Council in Melbourne. Best described as a “what the…” moment, Wiley launch a surprising take on the future of the food industry, designed to provoke meaningful conversation and salute unconventional thinking.

This clip takes a jarring peek into a not so likely future. It seeks to remind that the way industries work is bound for change and thinking too must change with it. It paints a quirky picture of vertical integration and disruption of one of Australia’s major industries and aims inspire everyone who watches it to make a difference.

We would LOVE to hear your feedback on this new video. Watch it here:

Veggie is the most low-carbon diet, right? Well, it depends where you live

It is often claimed that a vegetarian diet is better for the environment, because grazing animals such as cattle and sheep produce a lot of methane, a far more potent greenhouse gas than carbon dioxide.

The areas needed for livestock grazing can also be much larger than those used for crops to produce an equivalent amount of food, so more land is cleared for meat than crops, which causes more carbon to be lost from the landscape.

But wait. As is often the case with complex environmental cycles, particularly those altered by human activities, this is only part of the story. While it is true that ruminants emit a lot of methane, and this is currently the greatest slice of the agricultural emissions pie, it is also true that these are not the only emissions associated with human agriculture.

Cropland generally uses more inorganic fertiliser than pasture, which means that the more plants you eat, the more of your greenhouse footprint comes from nitrous oxide – another potent greenhouse gas linked to use of industrially produced fertiliser.

Unfortunately, this means that sticking to a climate-friendly diet isn’t always just a matter of giving up steak and lamb chops. You also have to consider the soil types and farming practices in the places where your food is produced. And the bad news for Europeans is that eating meat is much harder to justify than it is in Australia, for instance, where livestock tends to be less intensively farmed.

Emissions and soils

Nitrous oxide emissions come from the turnover of nitrogen compounds in the soil, which in turn come from both organic matter (manure, soil organic matter) and synthetic fertilisers (primarily inorganic nitrogen).

This means that the biggest greenhouse impact would come from eating livestock animals that are disconnected from the soil, kept in barns and fed on crops (for instance, beef cattle fed on corn meal) rather than extensively grazing on pastures. This represents a climate double whammy because the crops lead to nitrous oxide emissions and the animals then produce methane.

The other greenhouse gas to consider is, unsurprisingly, carbon dioxide. Healthy soils contain lots of organic matter, which helps to reduce erosion, boosts water storage capacity (and therefore drought resilience), and acts as a storehouse for nutrients (thereby reducing the need for fertiliser).

When land is cleared for agriculture, the amount of soil organic matter can decline dramatically. And because carbon makes up around 50-55% of soil organic matter, this land clearing not only depletes soil health but releases greenhouse gas, as the soil organic carbon is converted to carbon dioxide and released.

Soil organic matter can be restored by plants, which take up atmospheric carbon dioxide as they grow. When they die, their biomass is then (partially) incorporated into the soil and converted into soil organic matter.

So does farming help soils?

The soil organic carbon pool is the largest land-based carbon store and the most dynamic globally of the non-living carbon pools. There is at least twice as much carbon stored in the world’s soils as there is in the atmosphere.

So planting crops to store more carbon sounds like an attractive idea. Unfortunately, however, cultivated soils contain up to 70% less soil organic matter than natural soils, so croplands are actually a net greenhouse emitter.

Conversely, soils used for grazing animals have much higher soil organic matter content than in cropped systems, and roughly the same amount as natural soils. This is probably because many grazed systems are permanent pastures, where plants constantly grow and add to the soil carbon pool (even after the animals have eaten their fill).

But this distinction is not captured by official figures from the Intergovernmental Panel on Climate Change (IPCC), which only reports non-CO₂ emissions from agriculture, and assumes the CO₂ emissions from agriculture to be net zero (CO₂ emissions due to soil carbon loss appear in the “Forestry and other land use” category).

This means that the greenhouse emissions due to crops, and carbon storage in pasture lands, may both be underestimated. This issue is highlighted by our research, which shows that carbon losses from cropped soil extend far deeper than previously believed.

Previous estimates assumed that only the topsoil (generally the top 30 cm) was affected, but we have shown that, in Australia at least, this is not the case – the lower carbon content of cropped soil is detectable all the way down the soil profile. We also found that, at these deeper depths, natural and grazing soils contained very similar amounts of carbon.

As if that were not all complicated enough, there is yet another factor: when livestock manure is returned to the soil, this also boosts soil carbon, making for healthier soils and partially offsetting the animals’ greenhouse emissions. Declining use of animal manure on European crops has beenassociated with a reduction in soil carbon storage.

Food for thought

So what does this all mean? Well, 90% of our energy intake comes directly from the soil, so agricultural practices obviously have a big effect on soil health. If you care about conserving soils as well as minimising your greenhouse emissions, it’s not as simple as just going vegetarian.

Grazing animals can be good for soils, even though their methane emissions are bad for the atmosphere. Working out where the balance sits is a fiendishly tricky question. This is because agricultural emissions are related to individual site factors (such as climate or soil type) as well as agricultural practices (such as fertiliser regime or grazing intensity).

Perhaps the best approach is try to source your food from local suppliers (to reduce your food miles) who do not use intensive agricultural practices (such as frequent tillage or indoor mass-rearing of animals).

If you eat meat, choose free-range, grass-fed animals instead of those fed in barns using food from crops. Get to know how your food is produced, and choose the most sustainable options, whether meaty or not. Small choices can help to save our soils.

Eleanor Hobley, Postdoctoral Fellow, Technical University of Munich and Martin Wiesmeier, Researcher, Technical University of Munich

This article was originally published on The Conversation. Read the original article.

Morrison ticks off sale of Australia’s biggest dairy to Chinese buyer

Treasurer Scott Morrison has approved the $280 million sale of Australia’s largest dairy farming business to the Chinese-owned Moon Lake Investments.

Morrison announced he had agreed to the acquisition of the land and assets of the Tasmanian Land Company (TLC), including the Van Diemen’s Land Company (VDL) from New Zealand’s New Plymouth District Council (NPDC), subject to conditions on taxation.

He said his decision was consistent with the recommendation of the Foreign Investment Review Board.

Moon Lake is owned by Lu Xianfeng. Lu is the managing director and executive chairman of Kresta Holdings Limited, Australia’s largest window-covering retailer.

VDL, which dates from 1825, owns and operates 25 dairy farms in Tasmania, milking some 18,000 cows. The Treasurer pointed out that “VDL is currently a foreign-owned company that has always been owned by foreign residents”.

Morrison said he had considered the national interest test, including the likely impact on local jobs and increased investment to support economic growth. “In particular, the national interest test requires consideration of the impact on taxation revenue,” he said.

Approval of Moon Lake’s application is the first under new conditions, requiring it to comply with Australian tax law, Australian Taxation Office (ATO) directions to provide information about the investment and to advise the ATO if it enters into any transactions with non-residents to which the transfer pricing or any anti-avoidance measures in the tax law might potentially apply.

Morrison said Moon Lake had guaranteed all VDL employees would be offered jobs on terms no less favourable than their present ones.

It had also committed to investment projects on the VDL farms “which will provide additional economic activity to the Tasmanian economy, and based upon Moon Lake’s estimates will result in a near doubling of employment at VDL”, Morrison said. “This will guarantee more than 140 local jobs, generate an intended additional investment of over $100 million and an expected additional 95 jobs.”

Moon Lake planned to continue to supply the milk under the present contractual terms. This meant the supply of milk and milk products would not be affected – indeed supply might increase with more investment, Morrison said.

He said the VDL land had important cultural and natural heritage significance.

“Moon Lake has committed to honour the terms of all environmental and cultural agreements entered into by VDL, including with the local Aboriginal community. This also includes the ‘in principle’ approval for the construction of a Devil Proof Fence at its Woolnorth property to help reduce the spread of Devil Facial Tumour Disease among the Tasmanian Devil population,” Morrison said.

Businessman Dick Smith condemned the approval as a “disaster”. “You may as well not have borders if you are going to sell everything off,” Smith said.

The decision follows controversy about the purchase and comes before Morrison must decide on whether to approve the sale of the pared-down Kidman empire to a Chinese buyer. Earlier he rejected the Kidman sale particularly on the security grounds that Anna Creek Station, the biggest working cattle station in the world, overlapped the Woomera Prohibited Area. Anna Creek has been removed from the restructured bid.

The Conversation

Michelle Grattan, Professorial Fellow, University of Canberra

This article was originally published on The Conversation. Read the original article.

Fonterra extends the life of milk

Launched this week, Anchor Milk has arrived in Australia and brought with it a new microfiltration technology, which will initially be available in Victoria.

While all milk is pasteurised Anchor goes one step further by using microfiltration to reduce the naturally occurring bacteria in pasteurised milk that causes spoilage by an additional 95 per cent. 

It does this by pushing the milk through a special ceramic filter, creating a beautifully fresh tasting finished product that has an extended shelf life of 21 days.  Normal pasteurised milk has a shelf life of 15 days.  

No additives or preservative are added to Anchor milk to achieve this longer shelf life.  In fact, it’s all about what’s removed to create the very finest filtered product. 

While Anchor offers a similar nutritional profile to other supermarket milks, the big difference is in its taste.

“Anchor is clean on the palette and has distinctly no after-taste – even after a week or two in the fridge,” said Kiril Simonovski, Director of Marketing at Fonterra.  “It really is beautiful milk and we think it offers consumers the best of both worlds through its superior taste profile, combined with the convenience of an extended shelf life.

“We know consumers shop by used-by-date because they want the freshest product.  We think Anchor will appeal to discerning households looking for a premium product with a recommended retail price of only slightly more than regular milk,” Simonovski added.

CSIRO Food Manufacturing Leader, Darren Gardiner, said microfiltration had been received well in other parts of the world.

“While we’re all familiar with the concept of filtration when it comes to water and coffee, the additional step of filtering out the unwanted bacteria in milk before pasteurisation is a major development in fresh milk,” Gardiner said.  

Anchor Milk is sourced exclusively from a small number of farms in Western Victoria, located close to where the milk is processed.  These farmers deliver high quality milk all year round. 

Fonterra hits record exports but milk volumes still down

Fonterra Co-operative Group Limited has announced it has exported record volumes for the month of December 2015.

Export data for the Co-operative in December confirms the new record for a single month’s volume, with more than 300,000 metric tonnes shipped globally.

December’s volume was approximately 10 per cent higher than Fonterra’s previous record month in December 2014.

Fonterra Managing Director for Global Ingredients, Kelvin Wickham said the new record reflected the ongoing successful performance of Fonterra’s direct-to-customer ingredients, consumer and foodservice sales despite the tough global market environment.

“This is an excellent achievement by our sales and logistics teams and it is gratifying to finish 2015 on a high with this record export volume.”

“We have seen unprecedented global volatility due to geopolitical events over the past year. The dairy market has been a tough environment globally, so we are pleased to achieve record export volumes despite the challenges.”

Wickham said the new benchmark would be difficult to surpass as reduced milk volumes began to impact on the Co-operative’s production levels.

Fonterra is forecasting a year-on-year reduction of milk volumes by at least 6 per cent this season as farmers responded to the low milk price environment and dry conditions impacted parts of New Zealand.

Since August 2015, Fonterra has reduced the amount of whole milk powder it expects to offer on the GlobalDairyTrade (GDT) platform over the next 12 months by 146,000 metric tonnes in response to a change in product mix away from base milk powders and continued successful contracting and demand through other sales channels.

“An increased portion of product is being sold through bilateral customer agreements for a premium on prices achieved on GDT. Ingredients inventory levels for the first quarter were in line with the same period last year,” said Wickham.

Fonterra finds novel way to drive cream sales in China

Fonterra China Foodservices has partnered with the country’s biggest restaurant rating website, – a site with more than 180 million active users – to find the best cakes in China using Anchor Cream.

 Esther Chu, Vice President of Fonterra China Foodservices, said the campaign has made an immediate splash among Fonterra’s bakery customers and consumers in China.
“More than 5,200 outlets from 158 bakery customers in 241 cities across China have jumped on board and, in just three weeks, more than seven million votes have been cast by Chinese cake lovers,” she says.
“Before the campaign started, only 54% of the 405 participating recipes were topped with Anchor cream so to qualify all of them have converted, which will have a direct impact on our sales.”
With Christmas, New Year and Chinese New Year, along with a number of major festivals, all falling within the space of a few short months, winter is the peak season for cake consumption in China.
“The competition is perfectly timed to maximise brand and product exposure and drive cake sales, and the response from our customers and their consumers is testament to that,” says Chu.
Every drop of Anchor Cream used in the competition is sourced from the Co-operative’s new state-of-the-art UHT facility at Waitoa, in the Waikato, meaning it is the freshest whipping cream in the market, says Operations Manager Russell Muir.
“China is a real growth market for UHT cream, so we’re pulling out all the stops to ensure when our customers order Anchor they’re getting the freshest cream. We’ve put a programme in place to get our cream to market faster and have managed to cut that lead time down to around 33 days from Waitoa to China.”
Fonterra’s premium Anchor brand is already a leading player in China’s dairy cream segment. But the business has an ambitious goal to increase Anchor cream sales at a 42 per cent compound annual growth rate from F15 to F18. To achieve that, it will continue to work hard on converting bakery customers from using non-dairy to Anchor dairy ingredients.
“The market share of dairy cream in China’s booming bakery sector is still small compared to more matured markets. But with bakeries gaining popularity and Chinese consumers’ increasing awareness towards health, there has been steadily increasing demand for dairy nutrition here in China. This creates huge opportunities for our Anchor professional dairy ingredients business here,” Chu noted.
The campaign winner will be announced in January 2016.

The a2 Milk Company growing on the back of baby formula

The a2 Milk Company has forecast its revenues will hit $285 million in the 2016 financial year.

The milk company said it has experienced a significant uplift in sales of infant formula in the month of November, exceeding the sales projected at the time of the previous forecast. This is expected to continue in the month of December. 

Based on the current trading trends, the a2 Milk Company is now forecasting Group revenue in the range of $300 million to $315 million, and Group operating EBITDA in the range of $33 million to $37 million for the 2016 financial year.

The Company’s Managing Director & CEO Mr. Geoffrey Babidge said, “The infant formula market in Australia is rapidly evolving and experiencing significant growth. The Company has recently increased the supply of a2 Platinum infant formula to our customers however we continue to experience a level of out of stocks on shelf. The strong trading performance advised today provides further evidence of the increasing appeal of the a2 Platinum brand in Australia and China and the growth potential in additional markets in the future”.

UPDATE: Fonterra offloads its Australian yoghurt business to Parmalat

Fonterra has announced it will sell its Australian yoghurt and dairy dessert business to Parmalat Australia.

The sale, which is conditional on regulatory and other approvals, is expected to be completed in the first half the of the 2016 calendar year.

The divestment of its Australian yoghurt and dairy desserts business, which includes manufacturing sites at Tamar Valley and Echuca as well as its Australian yoghurt and dairy dessert brands, is part of a comprehensive plan to return the Australian business to strong and sustainable profitability. 

Chief Executive Theo Spierings said these changes were the result of driving a clear strategic plan to transform the Australian business to deliver stronger returns to farmer shareholders and unit holders.

“We are focusing on areas where we can win in a highly competitive market, and that means optimising our product mix and streamlining operations to match, and investing in higher value add products that will deliver the best returns for our farmer shareholders and unit holders.”

“As a key part of our multi-hub strategy, we are matching these strengths with the opportunities across our 100 markets,” said Spierings.

Fonterra Managing Director Oceania Judith Swales said Fonterra is “totally committed to the Australian dairy industry”

“We will continue investing in programs and innovation that supports our market-leading brands in key retail categories, including Western Star butter and Perfect Italiano, Mainland and Bega cheeses, Anchor cream, and fresh milk.”

“Divesting the yoghurt and dairy desserts business will allow us to focus on what we do best, so we can continue delivering a competitive milk price to our suppliers, benefits to our customers, innovative dairy foods to our consumers, and improved returns to our farmer shareholders and unit holders,” concluded Ms Swales.

According to a Fonterra spokesperson, the decision to sell our Australian yoghurt and dairy dessert business is part of a comprehensive plan to return Fonterra’s Australian business to strong and sustainable profitability.

"The sale will allow us to focus on what we do best, and lock in our competitive position in the Australian market – we will focus on investing in the growth of our other market-leading brands, including Western Star, Perfect Italiano, Bega, and Mainland, and our recently launched Anchor brand."

"It’s no secret our yoghurt and dairy desserts business has been challenged in recent years," the spokesperson said."

"Our people have worked hard to improve the returns from our yoghurt and dairy dessert business, and their efforts have resulted in good performance from Tamar Valley and agreements achieved with key customers to drive volume and category growth. It is a sign of respect for their hard work that all employees at our Echuca and Tamar Valley plants have received offers of employment from Parmalat."

"This sale will have no impact to our Anchor or Riverina Fresh yoghurt, which we produce in foodservice format at our Wagga Wagga facility, nor will it impact our New Zealand yoghurt business."

Malaysia consumes 1.9 million glasses of NZ milk every day

More and more Malaysians are looking to Fonterra dairy to meet their daily nutrition needs with local consumers enjoying the equivalent of 1.9 million glasses of Fonterra branded dairy products every day. 

 This includes Fonterra consumer branded and foodservice products, sold in Malaysia under the Anchor, Fernleaf, Anlene, Anmum, Mainland and CalciYum brands. Fonterra also sells dairy ingredients to food and beverage manufacturers in the country.  
Fonterra Brands Malaysia Managing Director Jose Miguel Porraz-Lando said Malaysians are consuming more dairy than ever before and Fonterra is well placed to meet this growing demand.
“Fonterra has been supplying high-quality dairy nutrition to Malaysians for generations and today we’ve got market leading brands across the dairy category. Anlene is the number one high calcium milk product in Malaysia, Anmum Materna is the leading maternal milk brand and we’re market leaders across the foodservice category.”
Mr Porraz-Lando added that Fonterra’s two Malaysia-based manufacturing facilities have the capacity to process 10,000 metric tonnes of New Zealand dairy products each year.
“We make these New Zealand dairy ingredients into a range of consumer-branded products that are consumed locally in Malaysia and exported to markets across South East Asia and the Middle East.
“The region’s fast-growing population is becoming increasingly wealthy driving dairy demand growth across the region. This presents an exciting opportunity for Fonterra and we’re helping to capitalise on this opportunity through our Malaysia operations,” said Mr Porraz-Lando.

Fonterra maintains milk price despite China slowdown

Fonterra Co-operative Group has said it has maintained a forecast Farmgate Milk Price of $4.60 per kgMS. Along with the November announced estimated Earnings Per Share range of 45-55 cents, this amounts to a total available for payout of $5.05-$5.15 kgMS and would currently equate to a total forecast Cash Payout of $4.95-$5.00.

 Chairman John Wilson said the stable forecast reflected the Board and management’s view that international prices would continue to improve in the first half of next year.  

“While there are signs of a recovery, particularly in China, we still need the imbalance between supply and demand to correct.”

“That imbalance is starting to reduce with year to date production in the United States up by only one per cent and slowing, and New Zealand volumes expected to be down by at least six per cent over the current season. In the EU, however, farmers are continuing to push production, currently up one per cent.”

“We will provide some $390 million in support to around 75 per cent of our farmers through the most productive half of the season, including the peak."

Farms typically produce 60 per cent of their milk in the first half, with production beginning to taper off from December, so we have provided support when it is needed the most,” Wilson said.

Warrnambool Cheese and Butter adds a new channel to its brand

Warrnambool Cheese and Butter, Australia's oldest dairy operating since 1888, has acquired Lion Dairy and Drinks' everyday cheese brands – Coon, Cracker Barrel, Mil Lel and Fred Walker and now will be focussing its energies on its Foodservice business. 

Taking over the iconic Coon, Cracker Barrel, Mil Lel and Fred Walker brands, coupled with its award-winning Warrnambool Heritage cheddars, provides WCB the platform to leverage and grow in the Foodservice channel, the company said.

"We have always provided the input cheese to the Lion business and now we have these iconic brands coupled with our award-winning Warrnambool Heritage range it makes perfect sense to beef up and have a deliberate focus on our Foodservice offering," said WCB's National Business Manager for Foodservice & Industrial, Damien Sorensen.

"That means more simplified processes, a more efficient supply chain, better on-time delivery, regular customer contact – all the things that our customers expect a key supply partner to be. We just want to be easier to deal with, whilst providing a premium dairy offer," Sorensen said.

This focus has included boosting its Foodservice team around the country – a team that will continue to grow with the needs of the business and requirements of our dynamic and changing marketplace.

While WCB has had a relatively low profile in Foodservice previously, it is the engine-room to many of the country's highest profile dairy processors and this is just the beginning for WCB with bold plans to make Foodservice a key ingredient of its business.

To ensure the continued quality and consistency of all its products, WCB has also invested in additional staff including recruiting highly regarded cheese grader Dave Mellor from UK dairy giant Pilgrims Choice.

"Thousands of tonnes of cheese comes out of the dairy every year and it is up to me to grade it all. It's lucky I love cheese," Mellor said.

Anchor launches new premium cream range

The dairy aisle is set to experience a shakeup this month with the arrival of Anchor cream; a premium range of quality creams made from 100 per cent Australian dairy.

With over 125 years dairying experience around the globe, Anchor saw a gap in the market to deliver a high-quality, Australian-made, fresh cream range that boasts unique packaging for ultimate convenience in the kitchen.

Created with foodies and cooks in mind, the new Anchor Cream range features innovative markers on the side of the bottle to ensure precise pouring and easy measurement. For added convenience, screw top lids allow for safe storage and will eliminate those messy drips and leaks.
But the measure of perfection doesn't stop there. Anchor Cream's bottles are also unique in size, with exact one (250mL) and two-cup (500mL) size products to make following a recipe hassle free.

Originating in New Zealand, Anchor is a leading dairy brand in many markets globally and is renowned for its grass to glass supply chain. Now operating in Australia, a newly built state-of-the-art Cobden plant in South West Victoria, makes Anchor's fresh cream. 

Anchor cream is created from milk from a select group of 34 local dairy farmers to ensure the finest Australian dairy is used to create their cream.

Fonterra expands its Lactoferrin manufacturing capacity

It takes 10,000 litres of milk and sophisticated technology to make just one kilogram of Lactoferrin – a high-value ingredient that Fonterra has recently doubled its capacity to produce.

The new $AUD11 million upgrade of the Lactoferrin plant at the Co-operative’s Hautapu site is now running at full volume, helping to meet growing worldwide demand for the product affectionately known as ‘pink gold’.
Lactoferrin is a naturally occurring iron-binding protein found in milk and is in high demand, particularly in Asia, for a wide range of nutritional applications from infant formula through to health foods and yoghurts.
Fonterra Managing Director Global Operations Robert Spurway says although the volumes of Lactoferrin the Co-operative exports seem small compared to many other dairy ingredients, a little goes a long way.
“While we’re seeing strong growth in demand for Lactoferrin across a number of our key markets, the fact that we measure growth for this product in kilograms rather than in tonnes gives an idea as to the potency and value of Lactoferrin.”
“It really is the ‘icing on the cake’ for Fonterra, as it can be extracted out of skimmed milk or whey, without impacting the use of that milk in other dairy products.”

Extracting this specialised protein from milk is something very few dairy manufacturers can do, due to the investment needed in both capital and research and development, said Mr Spurway.
Fonterra Chief Science and Technology Officer Dr Jeremy Hill says growing demand for Lactoferrin in many Asian countries is due to research showing the diverse biological functions of the protein.
“Lactoferrin is present in human milk in high proportions, and breast-fed infants will consume up to three grams a day during their first week of life. This abundance of Lactoferrin in human milk is considered to be an indication of its importance in infant nutrition,” Dr Hill said.

First cheese rolls off the line at Fonterra’s Eltham plant

The expansion of Fonterra’s Eltham site has reached a key milestone, with the first individually wrapped slices of cheese now coming off its new production line destined for supermarket shelves around the globe. 

The new line is part of a $AUD32 million project to bolster the site’s cheese capability, doubling the amount of the world-renowned sliced cheese that can be produced at the Taranaki-based site.
Director of New Zealand Manufacturing, Mark Leslie says Fonterra is constantly looking at trends in key markets and working with customers to help meet their growth with investment.
“One of the most exciting things about our consumer and foodservice expansions is they’re almost entirely demand-led, meaning from the moment the first product comes off the line it’s already earmarked for customers in one of more than 100 markets around the world,” he said.
Leslie says these expansions also diversify the Co-operative’s asset mix, giving Fonterra more choices in what it does with farmers’ milk and allowing more agility in meeting changes in customer demand.
Sliced cheese made at Eltham comprises both individually wrapped slices and slice-on-slice cheese that is used in restaurants and fast food outlets, and is one of the Co-operative’s most in-demand consumer and foodservice products.
“It’s a product that really supports our V3 strategy, to deliver a greater volume of high value products, at velocity,” said Leslie. 
“Once completed, we’ll be able to make around 2.3 billion slices of cheese each year out of Eltham, all of it sold into growth markets in Australasia, Asia and the Middle East.”
Site Manager Brendon Birss said the team is excited to reach such an important milestone in the project.
“A lot of work has gone into completing the first phase of the expansion. Local builders and contractors have pulled out all the stops to get us up and running on schedule, and we’ve seen great results from the new lines in testing over the last few weeks,” said Birss.
The second stage of the expansion is due for completion in February next year with the new sliced cheese line closing out the project.

Fonterra’s Anchor dairy arrives in Ethiopia and Australia

New Zealand’s oldest dairy brand, Anchor, has appealed to new markets in Ethiopia and Australia with its range of milk powders and Anchor creams for various market groups.

Developing highly nutritious, top quality dairy products for new markets has allowed product innovations to dictate Anchor’s market position and the success from which the consumer brand can be further developed. 

According to Fonterra’s Global Brands and Nutrition Managing Director, Rene Dedoncker, “Ethiopia is the second largest population in Africa with close to 100 million people and the fastest growing economy in the world. However, despite the staggering economic growth more than 40 per cent of its population are malnourished and lack access to affordable nutrition.”

Fonterra worked with the Food and Nutrition Society to ensure that its products provided children with essential nutrients that would otherwise be missing from their diet.

The final production, packaging and distribution of the new Anchor product was completed at a far lower cost due to Fonterra’s joint venture with NZ local partner Faffa Foods.

Dedoncker believes that there is an opportunity to put cream on the weekly shopping list by motivating customers to buy it all year round and package it in cook-friendly formats.

The new range of Anchor cream will be available exclusively in Woolworth’s supermarkets across Australia, where the chilled cream category is worth over $300 million despite a decline in the number of fresh cream purchases.

Innovative bottle sizes designed to ensure precise pouring and easy measurement have also been added to the Australian market. Dedoncker believes that Fonterra’s experience in driving growth in the culinary market places it in the perfect position to capitalise on the Australian opportunity. 

This partnership, in conjunction with the 10-year contract to supply fresh white milk for Woolworths Select, is designed to help strengthen Fonterra’s partnership with the Australian retailer, said Fonterra. 


Is it the Year of the Lion for dairy exports to China?

Australia’ biggest fresh dairy company, the Japanese-owned Lion, has announced a second marketing partnership in China.

The Australian and others report that it will partner with Canton American Flower Lounge to sell Pura regular and UHT milk and other dairy brands in Guangdong province (population 104 million).

Its Pura brand has lost market share in Australia in the last year and is under pressure from cheaper, private label supermarket milk.

The Australian Financial Review reports that Chinese consumers, unlike local shoppers, are happy to pay extra for premium Australian brands.

"They are very thoughtful consumers about the nutritional value of what they consume, and are interested in the authenticity of the brand," managing director of Lion’s dairy business in Asia, Duncan Makeig, told The AFR.

"They'll get online and check our Australian websites … they want to eat what Australians consumers eat and drink, and they don't want to buy these made-up brands with a kangaroo on it – they want the authentic Australian product."

Nive Beef launches paddock-to-plate beef Jerky

Nive Beef has launched their brand new sustainable, paddock-to-plate beef jerky.

Nive Beef Founders husband and wife team Doug and Rachelle Cameron use low stress methods with their cattle and beef production and are proud to provide a product that customers can trust and enjoy.

Rachelle Cameron says that being involved in the manufacturing process of Nive Beef Jerky from beginning to end ensures product integrity and quality.

“We process our own 100% grass-fed cattle and use only the best cuts of meat to produce premium jerky for the consumer,” says Ms Cameron.

“The marinade used on the beef is Doug’s original recipe which also ensures we know exactly what is going into the meat in order to produce trustworthy beef jerky with a great flavour that our customers will continue coming back for,” she says.

Doug Cameron says the process has taken just under two years from idea to having a product on the shelf.

Nive Beef Jerky is 100% grass-fed, hormone-free and preservative-free jerky that is low in fat, low in sugar and high in protein.

Nive Beef Jerky Original is now available for purchase online and in some Southern Queensland retailers, with Hot & Spicy and Heated Garlic flavours still to come.

No tears over spilt milk as Murray Goulburn RTC profits soar

Murray Goulburn Co-operative (MG) today announced financial results for the year ended 30 June 2015.

Overall, MG had a revenue drop of $AUD2.87 billion, down 1.5 per cent compared to last year, which the company said, reflected “product mix optimisation in the face of declining commodity prices.”

With a Net Profit After Tax (NPAT) of $AUD21.2 million, marginally higher than the forecast, the company noted there was “strong growth in the strategic Ready-To-Consume’ (RTC) Dairy Foods business with revenues of $AUD1.13 billion, up 29 per cent on the prior year.

With $AUD500 million in new capital raised and strong operating cash flows, leading to a stronger balance sheet, MG also invested $AUD126 million in strategic capital projects to support growth in the capacity and capability of ready-to-consume dairy foods.

Commenting on the result, MG Managing Director, Gary Helou, said: “We faced difficult external factors with falling commodity prices throughout the year and a strong Australian dollar in the first half of the year, but managed those levers within our control to contain costs, support cashflow and optimise our product mix. 

“MG's strategic drive is focused on building world-leading capabilities to deliver a portfolio of ready-to- consume dairy foods, nutritional products and brands produced in Australia in formats suitable for our growing domestic and international consumer base.

“MG’s strategic shift towards these ready-to-consume dairy foods and value-added dairy products such as nutritionals is already buffering the business against external factors which we cannot control.

“In particular, MG’s Dairy Foods segment enjoyed a stellar year, growing strongly both in the highly competitive Australian domestic market and in key target markets internationally. The segment delivered 29 per cent revenue growth, an outstanding result.

“Our milk intake grew by 5.5 per cent due to a combination of organic growth and new suppliers. Importantly, milk supply grew across most regions, with the exception of the western region, which was down due to unseasonal conditions.”

In MG’s largest Dairy Foods export markets, China and Vietnam, new premium ‘metallic’ Devondale consumer packaging for UHT milk was launched and was well received, particularly in China where it is now helping to secure Devondale’s position among the top three imported milk brands.
Additionally, a range of new consumer and food service products were launched into key export markets including Devondale cream cheese, UHT cream and butter, significantly helping to expand our presence and broaden distribution.

MG said in a statement that it “continues to believe in the solid long-term growth prospects and fundamentals of the dairy industry…and is confident that a global supply response is starting to emerge as a result of the low dairy commodity price environment.”