Fonterra’s decision to begin a relationship with the a2 Milk Company (a2MC) to source more a2 milk in Australia is a potential a “game-changer” for the Australian dairy industry, a leading dairy industry analyst says.
Rabobank senior dairy industry analyst Michael Harvey said the relationship announced last month between Fonterra, a global milk company, and the much smaller a2MC could make the a2 milk market a significant player in the dairy industry.
a2 milk is milk from cows that have been genetically selected to have the trait where their milk only contains the A2 beta casein protein.
Many other cows’ milk contains both the A1 and A2 beta casein protein, which can present digestion problems for some people.
a2 milk currently comprises five per cent of the Australian liquid milk market but the relationship aims to grow demand in both local and international markets for products using the a2MC’s brand strength and capabilities.
Fonterra Australia’s milk supply general manager Matt Watt said the company would begin discussions in coming weeks with its suppliers to gauge their interest in converting to an A2 milk pool. Those discussions would determine where the A2 milk pools were likely to be developed, he said.
“The volumes of milk required for the agreement are commercial-in-confidence,” Mr Watt said.
“We recognise there are costs associated with converting a farm from a standard milk pool to A2 and that farmers need to see the value in converting their milk pool. We’ll factor this into our pricing and work through this in the coming months,” Mr Watt said.