28,500 copies distributed monthly – to every rural mailbox in Canterbury and the West Coast.
May 2012
INSIDE Dairy Industry’s tardiness Page 7
Falloons welcomes its newest Director Aaron Allred Page 8
A kind of mania
Page 33
At home, at school
CONTACT US Canterbury Farming 03 347 2314
on A2 milk ‘a tragedy’
by Hugh de Lacy A major blunder has been made by the New Zealand dairy industry in its failure so far to get aboard the A2 milk bandwagon, according to Lincoln University’s Professor Keith Woodford, who wrote the book on the subject. “It’s a tragedy that the national herd is not getting converted [to A2 cows] as fast as we can,” Woodford told Canterbury Farming. “The biggest threat to the New Zealand dairy industry is the A1/A2 issue,” he said, in that New Zealand could be left stranded should it be conclusively proved that A1 milk is a danger to human health. Woodford’s 2007 book ‘Devil in the Milk’ detailed the link between an opioid peptide called BCM7 that occurs in A1 milk — but not A2 — and heart disease, autism, schizophrenia and Type One diabetes, among major other diseases. Most of New Zealand’s milk and about 60% of its five million dairy cows are A1, and it would take seven or eight years to convert to 100% A2 by a combination of genetic testing and using only A2A2 Livestock Improvement Corporation (LIC) sires. Woodford’s latest call for the national industry to switch from A1 comes as the alternatively listed company marketing A2 fresh milk
globally, A2 Corporation, passes a series of major milestones in its development as a global business. They include: • Expanding profitability: In the second half of last year A2 Corp recorded a net profit of $3.1m, up 247% on the $894,000 in the same period of 2010, on revenue up 55.9% to $30m. • Achieving scale: The company’s market capitalisation has ballooned to around $260m, which puts it in the league of one of the New Zealand Stock Exchange’s few big agribusiness securities, Pyne Gould Wrightson, which has a market cap of just under $300m; two years ago A2’s market cap was $20m. • Expanding market share: During a ferocious 15-monthslong fresh-milk pricing war among the Australian supermarkets which cut the price of house-brand A1 milk to $A1/litre ($NZ1.26), A2 milk’s market share rose to 5% and sales expanded 30% while its price of just under $A2.50/ litre ($NZ3.15) remained unchanged. • Gaining a powerful partner in the United Kingdom market: A2 has teamed up in an exclusive UK and Ireland distribution and marketing deal with German-owned Robt Wiseman and Co, which commands a third of the 6.5
billion litres-a-year UK freshmilk market. • A partner at home: A2 has teamed up with Chinese-owned Canterbury milk processor Synlait to manufacture infant formula for the Chinese market. • A factory of its own: A2 Corp last month opened a $9.5m factory in Sydney which will process 10 million litres of A2 milk a year for the Australian market, which is growing at 40% a year. “All of a sudden [A2 Corp] has got to a scale where [it] cannot be simply ignored as totally speculative,” Woodford said. “Increasingly some of the big players in the dairy industry are recognising that it’s getting time to act.” Whether one of those players is the giant local cooperative Fonterra, Woodford says he doesn’t know. Fonterra has always been sceptical of A2’s claims, especially in the light of reports by both the New Zealand (NZFSA) and the European (EFSA) Food Safety Authorities that did not endorse the A2 claims. The European report, which came out in 2009, appears to have been the reason that Westland Milk Co-operative abandoned earlier-announced plans to have all its suppliers switch to A2 cows.
Woodford said that despite the EFSA saying it could not see how A1’s BCM7 protein could penetrate the gut and access the brain by way of the bloodstream, but “it did confirm that BCM7 is only released from A1 milk, and it did confirm that BCM7 is bioactive.” Since then, Russian research seems to have confirmed that BCM7 does penetrate the gutwalls of infants, and may be one of the causes of acute lifethreatening events (ALTEs) in babies. Woodford said despite the inertia of Fonterra and Westland on the issue, he was aware of many dairy-farmers round the country gradually moving their herds across to A2 simply by selecting on LIC sires listed as A2A2. “There are a couple of bulls around at the moment that are
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carrying another version of the [BCM7] gene called the B Version, which is neither A1 nor A2, but is like A1 and may be even worse. “Keep well clear of that one,” Woodford advised. “If you really want to shift across quickly and get up to 100% A2 in seven or eight years, then you do need to genetically test the cows,” as well as use only A2A2 semen. Owners of large or multiple herds could make the switch immediately, simply by identifying the 40% or so of their cows that were already A2, and running them as a separate herd. “If I was dairy farmer in New Zealand at the moment I would definitely be using only A2 semen, and I’d be doing it as much as anything as a risk management strategy,” Woodford said.