Wednesday, January 6, 2016
Thursday, December 10, 2015
PKE & bobby calves areopportunities
The world is looking for high quality, sustainable dairy, produced ethically that stands against the industrialisation of food production.
I've spoken to people within Fonterra in recent months. A comment I've heard more than once is "our farmers just wouldn't accept that".
Wednesday, May 13, 2015
My goal is to set up a streamlined system that will allow others to start their own small scale dairy business.
My inbox is full of people asking me questions about how to set up their own milk business. I would spend 45 minutes to an hour replying to these emails from complete strangers. I did it because I want to promote small scale dairy & I want others to do well.
But of all these emails I've replied to, less than 10% of these people actually reply back to me. I think it is just good manners to at least flick a quick response back to me saying "Thanks Glen".
So I'm reluctant to devote much time to tyre kickers. I'm more than willing to help people who are serious about setting up a micro dairy. Any enquiries I get from now on will be directed to this blog post.
The equipment is the easy partLots of people are asking questions about the mobile cowshed or the pasteuriser or various equipment questions. But in many respects the equipment is the least of the issues that need to be faced.
To build a mobile cowshed you simply need to talk to an engineer and your local milking machine guy and you'll be able to get something made up.
The mobile milking equipment simply allows people to get into the milk production business at a lower cost.
People still need to have willing customers, provide customer service, match supply to demand and generally be better than their competition. All the while dealing with the regulations and the significant ongoing regulatory compliance.
The real issue you worry about is Too much work for too little money
Small business is hardSmall businesses have a terrible success rate. Studies from around the world all seem to show a pretty bleak picture.
"8 out of 10 new businesses fail within the first three years"
"80 percent of new businesses fail within the first five years"
"53 percent of small to medium-sized enterprises (SME) fail within the first three years"
Is it really worth it?I recently spoke to a cheese maker who was shutting down their business. They had an award winning product that was stocked in major supermarkets. But when all things were considered, it was just too much work for too little money.
I think many of the business failures we see in the statistics amount to the owners saying to themselves "for the amount of effort and stress I'm going through. The money is just not good enough. I may as well just get a job"
Anyone can start a business, the hard part is creating a business that provides a healthy margin and does not require the owner to be over worked.
You need to overcome the following issues
RegulationsAny business that processes milk (or meat), comes under a whole extra range of food safety regulations. It's not like starting a cafe where the local council inspector does your audit once in a while.
These extra requirements are particularly difficult for small dairy producers. The story of Biddy is a classic example. MPI have to ensure she meets all the regulations. I support MPI's position, but at the same time the burden is huge on a business her size. I spend more time doing paper work than I do actually milking my cows.
Don't underestimate the time it takes to be compliant. If you don't do it properly you will get smashed at your regular audits.
Time offMany small businesses are dependant on the owner. The owner has all the knowledge. The thing I have noticed with small food producers is that the operators find it very hard to take time off. The purpose of being in your own business is to have more options and a better lifestyle. When you are processing milk you can't just hire a relief milker, you need fully trained and competent people. How does a one man band justify the training expenses of someone who will only milk a few weeks a year. Don't forget, there is paperwork that needs to be done for new staff & this will be audited.
Time efficient operationsWhen you are small scale, you can't afford to be messing around all day. You will be amazed at how quickly your day disappears.
Before you know it it's 4:00pm and all you've done is milk & feed 10 cows, pasteurise the milk and deliver it.
This is when you work out the $/per hour and you realise you may as well just get a job!
You need a system that is automated and designed with time efficiency in mind. The problem is, if you're going to build your own system (like I have) you won't know what is going to take up all the time until you've built it.
Even if you are awesome and you designed the perfect processing room/trailer/cowshed you need to be aware that nothing works as it should straight away. That gas hot water system won't keep working as they said it would, the pump they sold you will turn out to be inadequate 2 months into milking etc etc.
The hidden costsAdd $20,000 to your budget for unknown costs. You will need it.
I've spent $3,500 on milk testing to determine where a bug was coming from. We found the source of the the bug, but no one can explain how that bug was making its way into the milk. It seemed like this bug was defying physics. The result was I modified my pasteuriser at a cost of $3,500. There's $7K of unbudgeted costs that you would never have anticipated.
The stainless steel fittings used in the milking plant do not comply with the milk processing standards for the milk processing area. I only found that out during my inspection. Thats another $2,500.
I could go on and on.
Glen's grand planMy goal has never changed. It's been to create a dairy business that our best young New Zealanders want to be involved in and more importantly, can afford to be involved in.
- Attracting our best young people to agribusiness
- Moving New Zealand agriculture up the value chain
- Truly sustainable dairy farming
My vision is to set up a financially viable, environmentally sustainable, small scale dairy business that can be replicated throughout New Zealand by others.
My vision is to have a network of great people all around New Zealand supplying their local community with real, sustainable milk.
This is a network of people who understand, eco dairy farming, who understand processing and food safety, who also live and breathe customer service and understand marketing and how to build a branded business.
But there are many obstacles that need to crossed before this can happen.
The most obvious obstacle is that, I don't even really know how to create a "financially viable, environmentally sustainable, small scale dairy business" as I described above.
But I'm pretty sure I'll know in about 6 months time.
We must join togetherIt makes no sense to have lots of individual farmers all operating and administering their own 20,000 word Risk Management Programmes, while competing against each other and working themselves into the ground.
We need join together.
Fonterra farmers don't have to worry about dealing with MPI, because Fonterra have people to do that. Fonterra create the systems and procedures that the farmers need to follow.
I'm currently creating the systems and procedures and developing the equipment that will enable other small scale dairy farmers to comply with all the regulations, while also getting the daily tasks done quickly, efficiently and profitably. Doing it profitably is the hard bit.
For small scale farming to be viable we need to:
- reduce the regulatory burden on individual farmers
- co-ordinate fluctuating supply with fluctuating demand (don't underestimate this, it relates to profitability!)
- ensure operators can get some time off
A network of micro dairy farmersThe idea is to create a network in which small scale farmers can "plug into".
I believe a network of savvy young (or young at heart) farmers, can secure at least 5% of the New Zealand milk market.
I'll detail some rough numbers to give you an indication of how big the market is.
5% of the NZ fresh milk market equates to about 20.25 million litres of milk per year. If we assume that a cow will produce around 3,000 litres (low estimate, equivalent to 270 kgms) in a year. Then we would require 6,750 cows to be in milk at any one time. Which is the equivalent of around 8 Canterbury dairy farms.
If we assume that a viable business requires 30 cows (not proven yet) then we would need
225 farmers. Maybe 50 cows will end up being an economic unit, in that case 135 farmers will be able to meet 5% of New Zealand's milk needs.
How can 30-50 cows be an economic unit?The model I'm proposing is that the micro farmer is also the processor and the retailer, so they receive the total retail amount for their milk.
Below is a very rough and ready spreadsheet with some ballpark figures & estimates.
I still have no idea what the actual numbers are going to be.
My assumptions are conservative.
Production per cow is low, most dairy cows will be producing well over 400 kgms. I've assumed an eco cow in a dryland environment is much lower.
Revenue is also low, when you consider organic milk retails for $3.65/litre. Anchor blue top supermarket milk retails for $2.45.
I've budgeted farm expenses at double that of the NZ dairy industry. I'm not sure what they will actually end up at. Staffing numbers will have a big impact on the final number. Remember there are no economies of scale in a small scale business.
Owner's drawings at $100,000. I want to attract our best young people, these people have options and the ability to earn good money elsewhere. For small scale eco farming to spread it has to be financially attractive.
I want to stress these are rough estimates, experience has shown me that you never make as much money as you think you will.
The reason for outlining these numbers is I want to show that it's entirely possible to farm sustainably on a small scale and still make a good living.
So If you're interested in being a small scale eco dairy farmer, then watch this space.
Feel free to post a comment below or you can email me at glen dot herud at gmail dot com.
Wednesday, February 25, 2015
Two weeks ago The Ministry For Primary Industries approved my Risk Management Programme!
It's a huge achievement & it means that mobile milking & more specifically mobile milk processing is possible in New Zealand.
This now opens up a huge range of possibilities for us to develop some pretty radical and truly sustainable dairy farming systems.
I made my first delivery on the 10th February to our first and only customer C1 Espresso in Christchurch.
I first approached C1 over a year ago & told them that I was setting up a sustainable milk company that supplies real milk which has not being homogenised or standardised.
Sam, the owner said to me that they have their own coffee plantation in Samoa & they grow the fruit for their juices on the plantation as well. But he was not able to find a suitable whole milk supplier.
I think we've solved that issue.
The plan now is to iron out any issues and slowly increase our supply.
My first 7 cows will be drying off shortly and we'll give them a 3 month break over the winter. Assuming the bull has done his job, these cows will calve again in August.
I'm about to buy 7-10 autumn calving cows. These cows will calve in April & May and will provide the milk through the winter and the spring period.
Sunday, February 22, 2015
I featured on Radio New Zealand Nationals Country Life programme on the weekend. You can hear it here if you have 20 minutes spare.
I spoke about sustainable dairy, the mobile milking system, dryland dairy farming & why I think our dairy industry needs to move away from commodities and into branded product.
Monday, December 29, 2014
Is Raw Milk Safe? Some Pasteurisation Facts. Why I Won't Sell Raw Milk & What To Look For In A Raw Milk Supplier
So the raw milk vs pasteurised milk debate begins again. The comments on this article from June this year show the diverse opinions.
I grew up drinking raw milk from the vat. We looked long and hard at selling raw milk. We looked at the issues and decided that raw milk was not for us. I'll explain why.
Is raw milk safe or not?
The quick answer is, it can be safe, but it can turn bad very quickly.
First up, what is pasteurisation?
We boil contaminated water to kill bugs. Pasteurisation is simply heating the milk up to kill any bad bugs that may be present.
It's not just milk that we pasteurise either, most freshly squeezed orange juice is pasteurised, just as egg products are too. We don't seem to have debates about those products.
The pasteurisation process is a combination of temperature and holding time. For example you can heat milk to 60 degrees and hold it there for 30 minutes (called batch or low temp long time) or you could heat it to 72 degrees and hold it there for 15 seconds (called high temp short time HTST).
I've chosen a batch system where we heat the milk to 65.1 degrees and hold it there for 10 minutes.
Does pasteurisation affect the milk?
Yes & no.
Pasteurisation does not change the nutritional value of the milk such as fat, protein content etc.
But it does affect other aspects of the milk. The heat treatment process kills any "bad bugs" that are in the milk & it also kills any so called "good bugs" that are in the milk too.
To check that milk has been pasteurised. We conduct a test called the Alkaline Phosphatase test. This test is looking for the Alkaline Phosphatase enzyme. If milk is properly pasteurised, then alkaline phosphatase is inactivated. If it is detected then the milk has not been pasteurised.
This indicates that the heat treatment is affecting some aspects of the milk.
Does it matter?
There seems to be very little or no scientific evidence showing any benefit to drinking raw milk. But raw milk proponents will give examples of a friend or a family member who had an ailment that disappeared after swapping to raw milk. There's even books about how raw milk can cure autism. It hasn't made one bit of difference with my autistic son!
Either way both opinions will continue to exist.
I couldn't see any real evidence other than some anecdotal evidence that raw milk is better for you and that the pasteurisation process adversely affects the milk.
People are confused about what happens to milk
What I did discover in my customer & market research, was that the public don't understand what pasteurisation, homogenisation and standardisation is.
People try raw milk and they think "wow" that tastes so different to the supermarket milk. They conclude that it must be because it is raw milk.
The fact is, you can take milk from the same batch, pasteurise half of it & conduct a taste test. The pasteurised milk will have exactly the same amount of cream on top and taste exactly the same as the raw milk.
People can't tell the difference.
What people can tell the difference of, is if the milk has been homogenised & standardised. It's those two processes that alter the look, texture & taste of the milk.
There is a perception that you can only get full cream milk, straight from the cow, just like the old days. If it is raw milk. People think the pasteurisation process is what removes the cream or "waters it down".
I couldn't see any rock solid reason to sell raw milk. But I could see potential risks to selling raw milk.
How to ensure raw milk is safe
The food scientists will say that you simply cannot ensure that raw milk is safe. I think thats being a bit over the top.
After all I spent my whole childhood and teen years drinking milk from the cowshed vat. I also did a fair bit of milking and I remember accidentally dropping the teat cups into a fresh wet cow pat every once and a while and watching as the cups sucked it straight into the milk line. I survived.
Simply put, raw milk can be safe if it is produced to high standards and consumed in short order.
There are a number of people who produce and sell raw milk properly. They are registered with the ministry for primary industries and have testing regimes & procedures in place.
What makes raw milk unsafe?
The same things that could make pasteurised milk unsafe. The obvious issues are big bad bugs like, Salmonella, E.coli, B. cereus, Listeria & Staph Aureus. Pasteurisation will kill or deplete these bugs if they are present.
If any of these organisms are found in raw or pasteurised milk, you would have to ask serious questions about the practices of the operator.
The other things to consider are Coliform levels (fecal bacteria) , Aerobic plate counts (bacteria) & somatic cell count (measure of mastitis or infection in the udder).
The people who sell raw milk properly have Coliform, APC & SCC levels well below that of the average dairy farmer.
If raw milk is produced to high hygiene standards & has very low bacteria levels in it & it is kept at below 4 degrees C, then it will likely be safe.
Problems arise when the temperature is elevated above 4 degrees. Bacteria reproduce when it gets warm. If a bottle is left on the bench at room temperature, the bacteria can rapidly reproduce. Its possible that a bad bug is present, but in such low levels that it is not a problem. But it could reproduce to levels that then become a problem.
This applies to pasteurised milk too, but the difference is pasteurised milk will have lower bacteria levels in it and the bad bugs are heat sensitive and will have been killed. So any bacteria that are multiplying will not be harmful.
One of the reasons the New Zealand regulations only allow raw milk to be sold from the farm gate, is that transport from the farm and storage at a separate location, increase the risk that the milk is not kept chilled and it also extends the time in which the milk will be consumed.
Long supply chains and raw milk are not an ideal mix.
What to look for in a raw milk supplier
If you want to buy raw milk in New Zealand then there are a number of farmers doing it. You want to buy milk from someone who has impeccable hygiene in the cowshed & healthy cows.
The things to look for are:
- First of all look for their approval certificate from MPI. If they don't have one it means their systems have not been approved by MPI. They are breaking the law. Don't buy.
- How tidy and clean are the surroundings? Is there rubbish laying around? Is the cowshed clean, are the railings clean, has the yard been hosed clean, are the teat cups clean?
- Ask to see the old milk filters. The milk filter catches any foreign matter. If its green, that shows that cow poos on the cows teats have mixed with the milk. In my experience most commercial dairies will have green milk filters at the end of milking.
- Does the farmer have a large herd that supplies a milk company like Fonterra or is 100% of the milk going to be sold to the public as raw milk? This is important because if a farmer is milking 400 cows and simply diverts some of the milk to sell to the public. It is unlikely that they are following the required hygiene requirements for safe raw milk. They won't be washing & disinfecting the teats of all 400 cows.
- Ask about their milk testing regime, what are the bacteria levels that they aim for?
People love real milk that has not been heavily processed. Milk that has been standardised & homogenised is very different from real milk.
Many people jump on the raw milk bandwagon simply because they like the taste of real milk. Most of these people will be quite happy to drink real milk that has been pasteurised.
I don't think there is any advantage in drinking raw milk over "real milk" that has only been pasteurised.
To me any advantage (if any) of raw milk is outweighed by the risks.
I'm happy for people to drink raw milk if they want to, as people should be free to do as they please.
For this reason I support the current regulations that allow people to buy it from the farm gate. This allows people who really believe in raw milk to access it. But they have to be really keen to drive to the farm and collect it.
I'm happy for the public health system to treat you if you get sick too. After all the tax payer funds the treatment of people doing silly things on motocross bikes etc.
But I do have a problem with people feeding it to their young children. They are not able to fight off an infection as well as an adult.