Synlait CEO Resignation Highlights Deeper Challenges Facing Dairy Processor
A revolving door of chief executives at milk processor Synlait is a warning sign, says Lincon University senior lecturer in agribusiness Nic Lees.
This challenge has led Mid-Canterbury dairy farmers Brent and Sharon Trafford to join the revolution and become a2 milk producers for Synlait.
At the end of this season the Trafford's will join 200 other suppliers to Synlait's Dunsandel factory
Farmers supplying only a2 milk are growing in number: three years ago Synlait had three suppliers who were a2 only; in the new season that will rise to 65.
When a2 began to attract public attention a few years ago the Traffords were interested in it, but with no incentive for farmers to produce it, a2 lost momentum – though the Traffords remained keen.
With Synlait offering a premium of 20 cents extra per kgMS, all that has changed. By the start of the next season the Traffords will have around 750 a2 only cows on their 225ha farm.
Synlait's Mark Burnside says a2 milk demand is growing; most of Synlait's production goes to Australia and the company is planning to sell directly to the US and China.
All Synlait's a2 milk is powdered for its export markets in products like a2 Platimum Infant Formula.
All mammal milk is a2 milk, so it is more naturally structured to match human milk, which is perceived to be more tolerable to humans.
The benefits of a2 milk are yet to be clinically proven, but word of mouth has driven impressive demand Burnside says. In Australia it commands about 10% of the liquid milk market.
Synlait is doing long-term research on the benefits of a2 milk. It gets LIC to DNA test all cows in the a2 programme, and all progeny, getting a test result in four-six weeks. So far LIC has tested 60,000 cows.
Synlait also randomly tests the milk to make sure there are no mix-ups and to ensure the integrity of the product.
The company organises annual get-togethers of all its a2 farmers so they can meet and share ideas.
About 43% of the New Zealand dairy herd are naturally a2 cows so becoming an all a2 farm is not as difficult as it would first appear, and cows only need be tested when a farm is about to start production.
Brent Trafford says they are excited about the change, having found Synlait good to deal with and believing in what they are doing.
