High pet ownership in China contributes to turnaround in sheep milk fortunes

Green shoots of confidence are returning to the fledgling sheep milk industry.

The two key players, Maui Milk and Spring Sheep, are starting the new production season with previously high inventory levels now gone.

Spring Sheep – a Pamū backed company – said after a challenging two years when hoped for expansion in farm numbers could not happen, amazing growth opportunities were now available.

Maui Milk is also positive about the milking season with lambing on its Central Plateau farm starting two weeks ago.

This follows the company in March blindsiding its suppliers by telling them to stop milking immediately, saying the future was uncertain.

But the company chief executive Greg Hamill said signs were positive and 90 percent of this season’s forecast production was pre-sold.

He said China remained its primary market and while it remained turbulent “the Chinese market for us is certainly improving”.

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One of the issues for Maui Milk last season was the decline of the informal selling channel, Daigou, which virtually stopped during the Covid pandemic years.

Hamill said it was still part of its selling platform, but the business also had other selling channels.

“Daigou, e-commerce, that is still a big market for us. And through in-store and online we have the opportunity to sell through our food group subsidiary in China. So that is probably a market that we’re looking to extend.”

Hamill said effort was also going into expanding products and nutritional opportunities for the elderly was a key area.

Ten farmers will supply milk this season, four fewer than last year, but forecast milk volumes from the 11,000 ewes would be similar with milk collection starting at the end of the month.

Cautious approach

Spring Sheep has 15 suppliers milking 15,500 ewes which will produce about 25,000 lambs.

Company chief executive Nick Hammond said the company has been careful to balance supply and demand and for this season was not taking on new farmers, but the future looked strong with the company diversifying into new markets.

There were “incredible opportunities” in the Chinese pet nutrition market.

SHANGHAI, CHINA - AUGUST 18, 2023 - ICE International Cat Expo at Pet Asia, August 18, 2023, Shanghai, China. The world's high appearance level of valuable cats gathered together, these cats total worth more than 10 million yuan. ICE World Famous Cat Competition is a purebred cat competition combined with the international mainstream competition system, the full name is ICE International Cat Expo. With the improvement of Chinese people's living standards, the economic consumption boom of pet fans is also developing. (Photo by Costfoto/NurPhoto) (Photo by CFOTO / NurPhoto / NurPhoto via AFP)

“We’ve actually just joined with one of the best known pet brands in China, who make essentially advanced nutritional products for cats and kittens. They’ve been looking for something that’s very digestible, has a really good story, very good nutrition.

“What we’ve seen is a very large increase in the number of pet owners in China and we’ve been approached by a large number of of pet food manufacturers looking for something different.”

Returns for sheep milk used in the pet market also fetched high prices, Hammond said.

“A lot of the product lines for pets exceed the price points for humans these days. What we’ve seen in China, particularly as they reach the 100 million pet ownership mark and more of that in the cat space rather than dogs, we’re seeing a whole generation of Chinese coming through who have actually got pets instead of children.

“They treat their pets very much like you treat a child, you walk around Shanghai and see these pets dressed up, ready to go out for the night. They definitely feed them like kings as well.”

Looking to future seasons Hammond said farmer numbers would grow but it would be in line with demand and new product ranges being developed.

According to the news on Radio New Zealand

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