It appears that the cow dairy industry is not the only dairy industry going through a hard patch. The goat industry despite a lot of hype and a pretty good track record prior to 2022, also is struggling.
Made up of two major players, the Dairy Goat Coop (DGC) and the New Image Group (NIG) the total goat dairy herd consists somewhere around 120,000 milking animals, the larger percentage being made up of the DGC segment. It has been a shining light of a cooperative industry that, through keeping tight control on both its market and production, was able to provide attractive returns back to its shareholders to the point where it had to control growth to ensure markets were not oversupplied.
Back in 2018 in a PGP bid with Government the DGC undertook a project to:
- position goat milk infant formula as the preferred alternative to conventional infant formula
- provide a competitive advantage to the New Zealand goat milk industry that will be difficult to replicate in other parts of the world.
The aim was that by 2023 to have lifted the estimated potential economic benefit to NZ to $400 million a year in export revenue.
Obviously COVID came and put its foot in the mix and the view of the world has changed considerably. Despite this, by February this year (2023) the DGC has invested $11.25 mln into the program and with the government support a total of $18.75 mln has gone into it. (One 2018 report shows that the original spend was to be $29.7m so the foot has come off the pedal somewhat if the figures I’m seeing are correct).
Unfortunately, there does not appear to have been much good come out of it, although there is good reason to be confused. Earlier last year dairy goat farmers could have read several articles discussing the worldwide demand for goat milk; “New Zealand Dairy Goats (NZDG) is riding a wave of exponentially increasing global demand for dairy goat products”. Partnered with NIG they are reported to have over 7,000 goats in 2023 and growing.
However, three months later (May 2022) DGC members where facing what was being described as a “double whammy”. Not only were member suppliers having their quotas cut by -20% but on top of that their payout also dropped -30% (or possibly as much as -40%). By my maths the -30% price drop makes a total income reduction -44% (-52% if a 40% price drop) in gross returns. I’m not aware of any agricultural system that could sustain this.
In 2022 it was also predicting 2023 would be much the same.
The ‘culprit’ as usual is China, not enough babies, reduced consumer demand for the infant formula which the PGP invested over $18.75 mln in to make goat milk the premium product.
Where it gets a little confusing is while DGC members are all doom and stories of farming selling up their goat herds, the NZDG story, at least as recent as in the autumn of 2023 is still sounding positive. However by their accounts 80% of product is still going into China and in the form of “Infant Formula”, exactly what DGC in the $18.75 mln PGP with government were attempting to do. I did glean that NZDG were also not taking anymore new suppliers on board so not providing a home for those leaving the DGC.
Despite the problems that appear to be at least hitting the DGC, in France, which is the EU’s largest producer, pricing does not appear to have been hit the same. Likely due to less reliance on China. In fact, prices this year are considerably ahead of 2021
In the South Island of New Zealand, things are no better than the North Island, in fact it could be said they are considerably worse.
The largest dairy goat farm (Goat Island Dairy) in Otago went into receivership earlier this year and most goat milk for cheese making comes down from the North Island due to the small production base in the south. This is despite all the ‘hoop-lah” back in 2015 when stories were put out in the media of a new industry being set-up, based at Ashburton. Initially a canning plant was to be (and has been) set up followed by a spray drying plant. Unfortunately the spray plant has never eventuated with goat product coming down from the N.I. according to one report.
The lack of a commercial drier for goat and potentially sheep has been a major reason why neither sector has made any traction in the S.I. since the Blue River plant was taken over by a Chinese investor who didn’t see value, it seems, in utilising New Zealand made sheep or goat product.
In its earlier form Blue River was milking up to 18,000 ewes per year. Now milk powder is imported from, I believe, it’s co-owned Sardinia plant, although the New Zealand branding is still front and foremost. It is an anomaly of the New Zealand branding rules which MPI do not seem capable or willing to rectify.
Given the physical benefits of growing sheep in particular in the South Island it seems a pity that past governments did not see fit to invest more there, especially given the multi-millions projects in the North Island have received (around $20 mln for sheep milk alone). Having said that the N.I. sheep milk companies do appear to be making a pretty good fist of things and still expanding.
2 Comments
Both local goat farms have long since given up, I think they stopped in autumn 2022 but had been winding down since previous season. Around 2500 head. Lots of infrastructure and high cost in cut and carry, one place went through three or more tractors in two seasons so much time spent harvesting.
Looking across the fence, even at high prices I could not see any possibility of profit.
There used to be several small goat milking farms in our area.In the early 2000's , they were required to upgrade their plant to a very high standard. I think it was around a million bucks to comply.Most ceased to supply , one carried on , using the milk to raise calves.they retired around 5 years ago , and the goats went. now a dairy support block.There were also quite strict requirements on what the goats were fed.
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