The report commissioned by the Southland Regional Development Strategy was to examine the opportunities of growing the industry in the region.
According to the report the $124m target was achievable – which would equal 1.5 per cent of the region’s GDP – but there would need to be significant improvements in marketing, processing capabilities, and farming configurations tailored for sheep milking.
Asia, and in particular China, would be the primary export market, where sheep’s milk is perceived to more acceptable for those who are lactose intolerant.
Currently there is a shortage of ovine (sheep) milk in Asia, which is unlikely to be met as the middle class on the continent is set to expand to 4.9 billion by 2030.
There would also be major environmental benefits as well.
In the report, it cited studies which suggest that leaching from sheep milking operations would be approximately half that of their dairy equivalent.
While dairy farming equates to an average of 63kg per hectare of nitrate leaching, an equivalent sheep milking operation would leach between 30 and 35kg per hectare.
Antara Ag farm supervisor Greg Crombie said there was a unique chance for farmers looking to break into the industry in Southland.
“This is a genuine opportunity for New Zealand farmers.
“The huge thing in Southland is that you’ve already got a dairy factory set up … and you’ve got the knowledge in Southland, you didn’t have that 14 years ago.
“Southland also lends itself [to sheep milking] because it has high quality pasture feed, and better rainfall than other places in New Zealand.”
Crombie said new farmers would be needed to keep the momentum of the industry going.
“The thing is that people do get burnt out, the money runs out, so we just need some open-minded, courageous people to get on board … they’re the ones who are going to drive it forward.”
SoRDS project manager Sarah Brown said the study was important in providing options to strengthen and diversify Southland’s primary sector.
“The research’s findings are certainly encouraging and provide us with confidence to explore this opportunity further.
“Although in its infancy in New Zealand, sheep milking is recognised globally. Southland’s natural attributes and knowledge and expertise in agriculture means the region is well-placed to benefit from the growing demand for niche sheep milk products in high value markets.”
Brown said while there was much potential in the fledgling industry, it would take time and effort to fully realise its possibilities.
“We will need to work hard in a range of areas to achieve this goal. This means increasing farm productivity and creating strong partnerships between farmers and processors to market sheep milk products to global customers.
“Investment in marketing to ensure the products achieve the desired premium, the development of processing capabilities and farming configurations that deliver efficiencies for sheep milking will also be required.”
Currently the only major commercial producer of sheep milk in Southland is Invercargill-based Blue River Dairy.
Blue River Dairy sales and marketing manager Gareth Lyness said prospects in the sheep milk industry were looking good for growth.
“[Last year] we were the fastest growing agribusiness in New Zealand (in the Deloitte Fast 50 index). Now that’s not exclusively through sheep milk, but we are enjoying some pretty good growth through that the moment.
Lyness said the majority of the exports were from sheep milk infant formula being sold into China.
“We market it primarily on digestibility. There’s a common difficulty with digesting bovine dairy, particularly in Asian populations, and sheep milk is far less likely to trigger those adverse reactions.
“That’s not to say allergies to cow’s milk don’t affect sheep’s milk as well, but its far less common for people to have digestive difficulties with sheep’s milk.”
The report was compiled by the New Zealand Institute of Economic Research in December, working closely with Southland sheep milking company Antara Ag Farms.