Tuesday, 23 February 2021 14:55

Dairy shines in Covid world

Written by  Sudesh Kissun
Southern Pastures' Tom Bailey says consumers are flocking back to dairy products as Covid shines the light on health and wellness. Southern Pastures' Tom Bailey says consumers are flocking back to dairy products as Covid shines the light on health and wellness.

Consumers are flocking back to dairy products as Covid shines the light on health and wellness, says Tom Bailey, the new senior vice president for Southern Pastures.

Bailey, who took up his new role in Auckland after working as a senior dairy analyst for RaboResearch in the US, told Rural News that dairy demand has come roaring back as people seek natural nutrition and go back to basics – simple, uncomplicated, familiar and trusted food.

“Covid has emphasised health and wellness from many angles and demand for milk is back,” he says.

“There are specific examples of this on a national scale; the US has bought massive amounts of dairy as part of its food support programs,” he says.

“Chinese demand has also been very strong. The government has emphasised the health benefits of milk, and we are hearing that fluid milk demand is pumping.”

As a result, the Chinese dairy processors do not have excess milk, which they normally would, because fluid milk demand has been so strong.

This has helped bolster NZ exports as our exports meet growing demand and also backfill where domestic Chinese manufacturers are missing.

Bailey also says NZ ingredients remain at a substantial premium relative to the global markets, due to many factors – grass-fed is better, many brands require Fonterra specifications for label requirements, and NZ has a great working relationship with key importing markets, such as China.

Southern Pastures owns and operates 20 farms in Waikato and Canterbury and also owns boutique milk company Lewis Road Creamery. The company milks cows under a stringent independently certified 10 Star certified values program, which stipulates grass-fed, free-range, climate-change mitigation, human welfare, animal welfare, GMO-free, palm products free, growth hormones free, antibiotic stewardship, and environmental sustainability requirements. 

Premium milk produced under the Southern Pastures 10 Star program is currently used in Lewis Road Creamery’s grass-fed butter sold in Whole Foods and other stores across the US.

Bailey believes value-add dairy products of the type produced by Southern Pastures and Lewis Road are poised for significant global growth.

“We’ve seen a back-to-basics trend for some time now, with consumers seeking out high quality, nutritious dairy options over more expensive and less healthful alternative plant-based products,” he says.

“People are showing a clear preference for more natural, less adulterated foods with shorter ingredient lists.”

He said premium markets will increasingly pay more for dairy that has an authentic and traceable story.

“When you add attributes such as sustainability or more favourable omega 3:6 milk fat ratios you can extend your market lead, and that’s where Southern Pastures really stands out.”

Lost Opportunity

New Zealand milk volume is surprisingly declining in a highly profitable environment. 

Tom Bailey believes this is due to legislative uncertainty around environmental regulations and central bank policies creating reluctance to invest in dairy. 

“This is affecting banks’ willingness to lend as well as farmer ability to expand. This is a lost opportunity for the economy,” he says.

While NZ supply set for further possible declines, Bailey believes NZ premium are well positioned to be maintained relative to other global dairy export markets.

“Furthermore, consumers continue to show a lot of love for grass-fed products,” he told Rural News.

“Because grazing is amazing and NZ dairies are the most productive with the smallest environmental footprint in the world, NZ products should sell well.

“There is no doubt that premium consumers want our products – our Lewis Road brand has had fantastic traction in the US, and we are set to launch on Amazon, making us the first NZ butter brand store on Amazon.”

More like this

Returns 'not good enough'

Fonterra leaders are making their case for offloading the co-operative's $3 billion consumer business, noting that its return on capital has been nowhere near respectable.

Record milk price!

A record farmgate milk price for Fonterra shareholders is all but confirmed for this season.

Sharemilker completes the trifecta

The major winners in the 2024 West Coast/Top of the South Share Farmer of the Year award, Michael and Cheryl Shearer were happy to complete the trifecta.

LCAs tackle false narratives

The quest to measure, report and make sense of the energy that goes into food production has come a long way in the past 25 years.

Featured

Massey Research Field Day attracts huge interest

More than 200 people turned out on Thursday, November 21 to see what progress has been made on one of NZ's biggest and most comprehensive agriculture research programmes on regenerative agriculture.

Expo set to wow again

Stellar speakers, top-notch trade sites, innovation, technology and connections are all on offer at the 2025 East Coast Farming Expo being once again hosted in Wairoa in February.

A year of global challenges

As a guest of the Italian Trade Association, Rural News Group Machinery Editor Mark Daniel took the opportunity to make an early November dash to Bologna to the 46th EIMA exhibition.

National

Winter grazing warning

Every time people from overseas see photographs of cows up to their hocks in mud it's bad for New Zealand.

ANZ defends farm lending rates

The country's largest lender to the agriculture sector says it's not favouring home loans over farm and business lending.

Machinery & Products

Expo set to wow again

Stellar speakers, top-notch trade sites, innovation, technology and connections are all on offer at the 2025 East Coast Farming Expo…

A year of global challenges

As a guest of the Italian Trade Association, Rural News Group Machinery Editor Mark Daniel took the opportunity to make…

» Latest Print Issues Online

The Hound

Review SOEs!

OPINION: NIWA has long weathered complaints about alleged stifling of competition in forecasting, and more recently, claims of lack of…

Bank reset

OPINION: Adding to calls to get banks to 'back off', NZ Agri Brokers director Andrew Laming has revealed that the…

» Connect with Rural News

» eNewsletter

Subscribe to our weekly newsletter