27. Fonterra

I thought I should kick of 2013 with a (later than planned) blog entry less about my shenanigans, and more about dairy farming.

This post is about where the milk goes once it is out of the udder, and why the answer to that is the reason why the dairy industry here is in great shape, as opposed to the shambles in the UK. In most peoples opinons, it is pretty much down to the great milk market that exists here, in the form of NZ based multinational company Fonterra. The information included here is partly from my own online research and partly from chatting to Kiwi dairy farmers in the pub. 

Fonterra is a co-operative owned by about 10,500 dairy farmers, this is about 96% of the dairy farmers in NZ who supply to the one company.

Milk is bought in the simplest way, you are paid for what you produce, in milk solids (fat and protein), as opposed to litres. The price varies but is currently at about $5.65 - $5.75 per KgMS.

Milk is collected every night by the road-hogging, lane dominating Fonterra milk truck. We are currently sending about 10,000 litres every day of milk at about 8.5% MS. After collection, the tanker driver leaves a docket with a load of information. A sample is taken from each collection which is tested for milk quality.

This is a docket from early November (when the yield was high!)

 With out re-typing what the picture shows pretty well, you can see that a couple of days after collection, the basic test results (fat, protein and SCC) are published on the docket. This makes it much easier to continuously adapt and adjust the input to see an immediate effect on the output.

The quality summary at the end of the data shows some of the results of the quality tests that are done on the milk.
We have a big chart in the dairy which outlines the various quality standards. There is a lot of info which I am not going to type out, but here is the chart.

Basically you are fined various amounts for particular drops in standards, this is worked out by a 'demerit' point system. One demerit point = 5% of the value of the milk supplied. The different results from each test are given a value for points deduction, any demerits are flagged up immediately on the docket. I should say that this information is also updated online every day.

The tests the milk is subjected to include:

• Bactoscan (individual bacteria count - demerits start at 50,000/ml)
• Thermoduric and Coliform Plate Count (more specific bacteria)
• Senses (Human judgement of the quality of milk, i.e, colour, smell etc.)
• Sediment
• Colostrum levels (measured as Immunoglobulin 1)
• Inhibitory Substances (Penicillin / antibiotics - major fines)
• Freezing point (checking no-one is topping up the vat with water!)
• Somatic Cell Count (mastitis indicator - demerits occur above 400,000/ml we aim to stay below 200,000/ml and strip out more often if the SCC on docket rises sharply)
• Collection Temperature
• DDE (historically problems with pesticide contamination)
• Aflatoxin (apparently mushroom related)
• Reject Milk (the chart also points out, helpfully, that if the milk is not fit for human consumption, there will be no payment. 

The tanker picks up the milk between about 8pm and 1am. I am always flat out on the sofa, asleep in bed or cooking my tea, it has taken me weeks and weeks to get a photograph of the tanker which thunders right past the bungalow, rattling the glasses on the draining board, every night. 

I am overjoyed to be able to publish these photos, it is like the trophy moment at the end of a long stalk. You  can't see, but the driver is giving me a huge thumbs up for my efforts. 

The milk is taken to one of the huge manufacturing sites to be tested and processed. This is a photo of the Edendale site which I took when I drove past it on my way to Stewart Island a few months ago.

It is massive, and processes 15 million litres of milk per day. Most of the milk through here goes to make milk powder. A major difference to the UK is the lack of a market for fresh liquid milk, and the massive market for  manufactured dairy goods, particularly in Asia, but they conduct a huge amount of business on every continent. An interesting fact on the Fonterra website is that the company accounts for 25% of NZ's exported products and a shipping container of dairy products leaves the country every three minutes. 

More mind-blowing Fonterra marketing facts from the website: 

• Fonterra NZ processes 16 billion litres of milk per year. That figure is rising quickly.
• Fonterra operates in more than 100 countries across the world.
• Fonterra in Australia produces 300,000 tonnes of dairy products per year.
• More than half of the pizzas eaten in China are topped with Fonterra produced cheese.
• Fonterra sells enough cheese to McDonald's each year to wrap around the world three and a half times.

Now I know I am a bit of a cheese snob, but it says something about McDonald's cheese if it is measured in its stretchy wrapping properties. I bet they don't measure Stilton like that. Incidentally, according to my calculations 80 million Carr's Water Biscuit sized pieces of Stilton are produced yearly (approx).

I digress, but the fact remains that the huge multinational business, owned by the farmers, gives great strength to the industry. At the moment, and certainly in the foreseeable future, the country can not produce too much milk, there will be someone to buy it, for more money than it takes to make. Which, of course is the important bit.

The Fonterra website makes for some very interesting reading and has so much information I could do a blog  for a year just on the one subject.

I hope this gives you a bit of an insight into at least my take of the milk business here in NZ. I could do a lot more typing but I am getting up in 6 hours so I will call it a night.