Fonterra begins signing up suppliers for A2 production

Fonterra has begun signing up farms to supply milk for The a2 Milk Company in the 2019-20 season.

Last year, Fonterra announced it was entering a partnership with The a2 Milk Company with the national launch of the a2 Milk brand by Anchor from late September.

The co-operative's initial milk pool would be based in the Waikato, around its Hautapu site, and would support the production of ingredients. It was expected about 100 farms would be needed for next season.

While other regions were considered, Fonterra managing director of co-operative affairs Mike Cronin said the decision must be demand-led.

"The ability to efficiently manufacture a range of products to meet that demand was the overriding factor in choosing a site.

"As demand and product lines grow, we'll look to expand the milk pool to enable more farmers to participate," he said.

The announcement was welcomed by LIC, the country's largest supplier of artificial breeding services which said the increase in supply matched the demand it had experienced for its A2 genetics and testing services.

Last year, the co-operative introduced dedicated A2 bull teams and extended its test offering in anticipation of Fonterra's next move with The a2 Milk Company.

LIC's general manager New Zealand markets, Malcolm Ellis, who is also a Fonterra shareholder and farm owner, said the uptake had been "overwhelmingly positive".

"LIC has been offering A2 bulls since 2002, but the demand for the new teams in their debut season is the biggest shift we have seen in AB [artificial breeding] trends," Mr Ellis said.

More than 440,000 straws of fresh semen from the A2 teams were inseminated into New Zealand dairy cows through the spring mating period last year.

That accounted for about 10% of the company's total artificial breeding activity and reflected a "significant shift" in farmer behaviour, which was largely in response to the initial announcement that Fonterra was partnering with The a2 Milk Company, he said.

 

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