Thursday, 01 December 2016 07:55

Production cap keeps dairy goat co-op ahead

Written by  Sudesh Kissun
Dairy Goat Co-op chief executive Tony Giles. Dairy Goat Co-op chief executive Tony Giles.

Dairy Goat Co-operative, Hamilton, the world’s largest maker of goat infant formula, is happy to follow a market-led philosophy.

The co-op caps its supplier numbers and milk supply based on current and predicted sales growth; sales dictate milk supply growth.

DGC chief executive Tony Giles told Dairy News that supplier numbers rose by 25 in the last three years; the co-op now has 73 supplying shareholders, mostly in Waikato and some in Taranaki and Northland.

“We continue to operate our market-led philosophy; the 25 new shareholders in the last three years have joined due to current and [predicted] sales growth. We now have a waiting list,” Giles says.

DGC developed the world’s first goat milk-based nutritional products for infants in 1988. Last year it earned $178 million selling goat infant formula in 25 countries – chiefly Taiwan, Thailand and South Korea, and other sizeable markets including China.

Giles says while Asia remains the major export destination, DGC is also now looking at Europe.

“Opening new markets for goat formula is challenging because it is a new product concept for consumers and health care professionals.”

The dairy goat industry in New Zealand is flourishing, with other processors either set up or eyeing processing sites.

Giles believes it’s important the industry be demand-led, not production-led. “This is the philosophy we follow. If processors do a good job of developing products, brands and markets, then attracting milk should not be an issue.”

To supply DGC, farmers must buy milk supply rights, and production is capped for each supplier.

Tankers collect the milk on alternate days and deliver it to DGC’s Hamilton plant for spray drying and processing into finished canned products. The plant has two dryers and facilities for can making, blending and canning.

Food safety and milk quality are paramount, Giles says. DGC has rigorous quality standards and rules on feed and onfarm practices.

“The NZ brand is important, particularly in the Asian region, less so in regions such as Europe. Regardless of that, it is important that no product or brand relies on the NZ ‘brand’ alone.”

The farmer-owned co-op is run by a seven-member board of five farmer-elected directors and two independents.

Dairy Goat Co-operative Numbers

- Milk payout consistent about $18/kgMS

- $178 million turnover in 2015-16

- 45 million litres of milk processed
this season

- World’s biggest maker of goat infant formula.

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