Converting from Dairy Cows to Goats

September 2012

A couple move from sharemilking dairy cows to running dairy goats in Waikato

New Zealand has a long-established dairy goat industry. Dairy Goat Co-operative (N.Z.) Ltd is the main producer of products from goat milk in New Zealand. The main export is goat milk powders for infants and children.

The company exports to 20 different markets all over Asia and Europe as well as Russia, Chile and Turkey. DGC started with a core of 25 suppliers back in the 1980’s. They increased to 80 suppliers but through the 90’s and 2000’s farms have been amalgamated and the company settled on a core of around 50 shareholder suppliers.

The early stages of the industry were a little boom and bust. In more recent times the company’s marketing efforts in Asia have led to a surge in sales. After extensive clinical trials, the European Food Safety Authority this year declared that DGC goat milk powder was suitable for infant formula. The company has been selling its powder in Europe for 20 years but expects the ruling to significantly boost sales.

The nutritional value of goat milk is well established, however the cow milk industry around the world has developed in a more sophisticated manner in terms of production, marketing and research compared with the goat milk industry. The main advantage the cow milk industry enjoys is that cow milk can be produced more economically than goat milk, largely due to the greater productivity of the cow. That does not necessarily mean that cow milk is more suitable for human consumption. In fact, many consider that goat milk is closer to human milk.

Commercial goat milk industries around the world largely focus on production of cheeses, especially in Europe. In countries such as France and the Netherlands, the goat cheese industry is very large.

DGC in New Zealand on the other hand, has focused on the manufacture of nutritional products based on goat milk. There has been less research into the nutritional benefits of goat milk compared with the millions spent on cow milk, but now more research is being undertaken. This research is starting to explain the advantages of goat milk, and adding some science to the anecdotal claims.

DGC is now on the hunt for 10 new farms to start supplying in July next year, and another 10 by mid-2014 as a result of surging sales and new infant formula sales prospects in Europe.

DGC’s call for new farms had attracted many inquiries, although the size of the necessary investment – $5m to $8m including land – dampens some enthusiasm.

The cost of dairy goat farming is in the land and building barns to house the animals, buying DGC shares to supply milk, milking machinery and machinery costs for the modern “cut and carry” method of farming them.

Grass for dairy goats is mown and carried to the barns.

Goats are kept warm and dry which limits health issues, and “farms look spectacular” because fences can be removed and pasture is regularly mown.

DGC collects from the Waikato, Northland and Taranaki, but would prefer new suppliers to be in the Waikato. They are forecasting a payout of $17.50kg/milksolids this year. The average payout is $15kg and this has been steadily rising for 15 years.

According to CEO Dave Stanley, turnover this year is in excess of $100m for the first time. These days the DGC factory is selling 1 can every 2.9 seconds. They are selling their product into the market as quick as they can make it. Currently sales are up by 50%.

Andrew and Karen Duncan farm a dairy goat conversion (from dairy cows). The property is rolling to steep. They milk off 35ha of a total 47ha.

They milk around 550 does – aiming at 600. Six years ago they started off with 360. Their “herd” currently produces 58,000 kg/ms.

Around 85% of their herd is Saanen – which is typical. Their business is a “cut and carry” operation. Their animals are housed under plastic with a wood shaving base.

Farmers are paid on total solids, not just fat and protein. DGC suggests farmers planning to go dairy goat farming budget on $15 kg/ms. The payout in 2010/2011 was $16 and in 2011/12 was $17.50. Payments are made monthly.

DGC says costs per kg/ms sit at around $6.50 – $9.00. Their advice is that major costs include direct labour, feed, fert, bedding and animal health.

In general terms there aren’t that many milking does for sale. But if you can get your hands on them they can be milked from around 1 year old. DGC’s advice is to raise your own herd, buying kids directly from existing farmers. You should expect to pay up to $50 each.

They also suggest trying to source animals from CAE free herds. Caprine arthritis and encephalitis (CAE ) is a viral infection in adult goats. CAE can cause production losses of up to 25%. The DGC is working on an eradication programme.

The DGC says farmers should have bucks at a ratio of 1:20 up to 1:50 for mating. Dairy goat farmers are paying up to $500 for bucks.

Only a small proportion of the DGC suppliers use AI . There are questions about the success rate of AI in goats although clearly it is proven technology in dairy cows.

LIC does the herd testing for the dairy goat herds (testing for somatic cell, protein, fat and litres). New shareholders are being asked by DGC to herd test early to ensure they have the best stock.

DGC tells shareholders to budget on 15-17 goats per ha in an indoor operation. They recommend that the land is accessible to a mower (since most of the operations are cut and carry). In an outdoor operation they say you should budget on 12 does/ha. They caution that worm management is an issue in goats kept outdoors and that needs to be managed with the use of other classes of livestock.

A new 80 bale rotary is estimated to cost $650,000. This includes milk harvesting, cooling, milk silos and an in-shed feeding system. A herringbone is estimated at around $500 k – modifying an existing herringbone can cost from $50 – $150k.

Housing barns can range from $120k to $350k depending on the material used (plastic or pole and iron). DGC recommends that they have two side bays with a central feed race. Area should be calculated at around 1 goat per 3msq.

Farmers also need a tractor, front mower and a feed wagon.