Maui Milk is seeking new suppliers of sheep milk located within two hours of Hamilton for a new supply agreement with Danone.

Farmers between Auckland and Taupo can now take the plunge into sheep milk, says Maui Milk general manager Peter Gatley.

Maui Milk chairman Paul McGilvary says the company needs more sheep milk to meet market demand and achieve processing efficiency.

A Chinese company financing a multi million-dollar sheep milk venture near Taupo plans to build processing plants in other regions.

The sheep milk industry has seen a breakthrough in getting semen from European milking sheep approved for entry to New Zealand.

Maui Milk has acquired a 770ha farm near Lake Taupo and is converting it to a sheep milking operation aimed at achieving $4 million farm income within two to three years.

Talk of a billion dollar sheep dairy industry is unhelpful, according Maui Milk chief executive Peter Gatley.

Rising interest in dairy sheep is about to be matched by the availability of milking ewes thanks to 15-year-old frozen embryos.