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

Sustainability dominates dairy summit

To Kiwi ears, an international conference that talks about a "just and fair transition" to sustainable dairy sounds like a clarion call for better access to valuable markets. 'Just and fair' means more to the world than opening up borders to big exporters like NZ. Tim Fulton reports.

AI helps detect lameness early

Dairy farmers can boost their reproduction success this mating season by prioritising hoof health and early lameness detection to keep cows in top condition and make the most of a promising forecast payout, according to agritech company Herd-i.

'Quite a journey'

Former Synlait chief executive Grant Watson says the past two years have been quite the journey.

Featured

New ag degrees at Massey

Changing skill demands and new job opportunities in the primary sector have prompted Massey University to create a new degree course and add a significant major into another in 2025.

The show is on!

It was bringing in a new Canterbury A&P Association (CAPA) show board, more in tune with the CAPA general committee, that has ensured that Christchurch will have a show this year, says CAPA general committee president Bryce Murray.

National

Food charity to hold online auction

Meat the Need, New Zealand’s dedicated charity delivering locally sourced protein meals to food-insecure communities, is launching an online National…

Machinery & Products

An ideal solution for larger farms

Designed specifically for large farms that want to drill with maximum flexibility, efficiency and power, the new Lemken Solitair ST…

Landpower increases its offering

Landpower and the Claas Harvest Centre network will launch the Claas Scorpion and Torion material handling solutions to the market…

» Latest Print Issues Online

The Hound

Leaky waka

OPINION: Was the ASB Economic Weekly throwing shade on Reserve Bank governor Adrian Orr when reporting on his speech in…

Know-it-alls

OPINION: A reader recently had a shot at the various armchair critics that she judged to be more than a…

» Connect with Rural News

» eNewsletter

Subscribe to our weekly newsletter