4 Oct 2016

Calf rearers panic over Fonterra's milk powder shortage

1:27 pm on 4 October 2016

A rural animal feed store says Fonterra has told them that there is no calf milk powder for two weeks, causing panic among calf rearers.

A calf at the Lincoln University Dairy Farm

Fonterra has told one rural animal feed store there will be no calf milk powder for two weeks. Photo: RNZ / Cosmo Kentish-Barnes

Bunnythorpe Feeds says it's their busiest time of year, and calf rearers are having to buy second grade milk powder which could effect how well their calves grow.

Its owner, Elizabeth Howarth, said many stores in the North Island were facing the same problem.

"The supply seems to have run out about two weeks ago and it was impossible to order any milk powder from Fonterra. They just said they had no supply, which given it's the middle of the calving season seems bizarre."

Customers were not happy with the lack of good quality milk powder, Ms Howarth said.

"The demand is incredible and people are panicking because they can't get the premium product which is Ancalf, we do have a supply of 'brown bag' which is an inferior product, which you should only use if you've got access to cows milk as well - and a lot of lifestylers can't do that."

Ms Howarth said someone needed to be held to account over the shortage.

Fonterra said the shortage of its Ancalf powder was due to retail sales being unusually high this season at nearly double those of last year.

It is still manufacturing the product but expects the shortage to continue for a few weeks, and is advising farmers to consider alternatives including Brown Bag, early weaning and transitioning calves to meal.

Farmlands chief executive Peter Reidie said the co-operative was also having problems.

"Farmlands is experiencing supply issues with Calf Milk Replacer. There is a 7-10 day delay at present, caused by positive and unprecedented growth in Calf Milk Replacer volumes.

"We are delighted with the recovery from last year's volumes and our September Calf Milk Replacer volume was up 100 percent on last year."

He said this, combined with the rise in the forecast milk payout, meant more people are rearing calves, which was putting pressure on production.

"We are working hard to accommodate calf rearers by fulfilling our orders as quickly as possible. Our Calf Milk Replacer products are only distributed in New Zealand, so the demand from our end is exclusively local."

Concerns calves will scour

Tracey and Dave Thompson are rearing about 300 calves on the Takapau Plains and are having to use a mixture of calf milk powders because of the shortage.

Mrs Thompson said they were expecting their calves to scour because of the change in feed.

"We actually pre-order our calf milk powder so expected to have no issues with it but was trying to get a tonne in yesterday and it was a major issue so we had to change brands.

"It's a huge headache, we're expecting scours over the next few days of the change. Scours always put calves back in development. Hopefully the calves are old enough now to get through it and hopefully it won't be too big of an issue."

Ms Thompson said if they have to use milk out of the vat instead of milk powder then it starts to hurt financially.

She said Fonterra might have been able to have foreseen the rise in demand.

"Maybe not to this extent, but with the milk payout like it was perhaps they should have (forseen more people rearing calves) as people turn to an alternative income, which is beef because prices were up."

Fonterra said it was continuing to manufacture Ancalf on a daily basis and was encouraging farmers to consider alternatives including Brown Bag, early weaning and transitioning calves to meal.

Federated farmers dairy chair Andrew Hoggard said was odd for Fonterra to have a shortage of calf milk powder at this time of year.

"It does seem a little strange that they've run out, it's sort of out of the blue."

"I'm thinking potentially you'd have higher numbers of beef calves being reared which is where the increase of supply has come from."

Federated Farmers dairy industry chair Andrew Hoggard

Andrew Hoggard said it was odd to have a shortage of calf milk powder at this time of year. Photo: Radio NZ / Jemma Brackebush

But he doubted the demand for milk powder was coming from dairy farmers.

"The numbers I've worked out it doesn't make sense to use formula at really low milk prices - it's better to rather than put the milk into the vat, put it into the calves."

"If you're a beef rearer, someone who is not attached to a dairy farm, then it's going to be extremely challenging."

Mr Hoggard said calf rearers should be stocking up on milk powder when possible.

Westland Milk Products told RNZ it wasn't experiencing a shortage of calf feed and its volumes for the season to date were similar to past years.