What Would Synlait Be Worth to Fonterra or a2 Milk?
Speculation of a possible joint move by Fonterra and a2 Milk to buy Synlait raises a much bigger strategic question, says agribusiness expert Dr Nic Lees.
The Dunsandel, Canterbury, processor launched its Lead With Pride dairy farm assurance system to its 150 suppliers April 18.
“We are working with some of New Zealand’s best dairy farmers and we believe their desire for excellence should be rewarded,” says Synlait Milk chief executive John Penno. “Lead With Pride gives them that opportunity.”
Oxford dairy farmers Lance and Wendy Main are the first to be accredited with the ISO 65 standard.
“I believe it will help us maintain our standards and I think some extra profit should come out of it too because it will help us lift our standards,” Main told Dairy News. “We should have less waste water, electricity, fertiliser and the likes.”
The Mains are coming to the end of their third season as owner-operators milking and wintering 500 cows, and rearing young stock, on 255ha, having worked their way up through sharemilking in Southland and Canterbury.
As one of two guinea pig farms for the scheme he and, in particular Wendy, have done a lot of work with Synlait over the past year developing the programme to be farmer friendly.
Lance says they found they were doing most of what was required for accreditation already but there were a few gaps and tweaks needed in their “standard operating procedure” documentation of farm tasks.
“And there was a little capital expenditure needed: things we haven’t been able to do yet because of our position [as relatively new owners].”
For example, Aquaflex moisture meters were installed so irrigator use could be justified and fine-tuned, and an effluent irrigator fitted with a safety system so it shuts-off in case of breakdowns or over-runs. “They should probably be mandatory anyway,” notes Main.
The final step was an independent audit by AsureQuality.
“Two AsureQuality people went throught the whole process from top to bottom. It took them six hours. They split us up and each of us went through different parts of the process. Essentially they were checking we are doing what we say we are doing.”
Initial accreditation is for Synlait’s Gold Plus standard, earning a 6c/kgMS premium. After a year of maintaining those standards suppliers may apply for Gold Elite accreditation which earns a 12c/kgMS premium but demands even higher standards in environment, milk quality, social responsibility and, animal health and welfare.
The other farm to pilot Lead With Pride was one of Synlait Farms’ 13 milking platforms. Synlait Farms chief executive, Juliet Maclean, says she “very much welcomes” the initiative.
“I’d like to think that over the next three years we’ll achieve Gold Elite status on all our farms. There’s quite a lot of work involved and it will require some capital expenditure in some cases... but most of our systems and processes with livestock and people are right up there and in line with the requirements now.”
