New Zealand Sheep Milking the Next Big Boom in Dairy, Trade Deficit Widens as Milk Exports Decline

New Zealand's sheep milking is predicted to be big industry for New Zealanders in the future with Blue River Dairy planning to invest millions of dollars in new equipment.

Blue River is a Southland sheep-milking business in New Zealand that manufactures and processes ice cream, cheese and milk powder. According to company data, around 80 per cent of the sheep milk powder is exported to other countries.

Blue River Dairy plant production manager Robert Boekhout said the company invested in a milk powder canning plant at its property in Invercargill. The machine, which was purchased in August, gave the business greater flexibility in pursuing its plans to add baby milk powder to its product line.

Mr Boukhout said the investment gave Blue River Dairy the capability to produce high-value products as exports for Asian markets. This includes a range of baby formulas which New Zealand is already known for.

The company would also consider making baby formula for the New Zealand market. The company's new canning machine can process about 25 cans in a minute with a maximum of 50 cans per minute.

Although Mr Boukhout has experience in cow dairy farming, he believes that sheep milk will be the future of New Zealand's dairy industry. Blue River will hire more new employees once baby formula production begins.

He said people will start milking sheep in New Zealand soon. He predicts that it will be "the next big dairy boom in this country."

Blue River received an award from the Ministry for Primary Industries for besting the healthier choice category at the New Zealand Food Awards for its Blue River Sheep Milk Powder. The judges described the milk product as "very New Zealand" and they were very impressed. Consumers who are allergic to cow's milk can choose to drink sheep milk as an alternative.

Meanwhile, Fonterra's earnings declined after a slump in milk production. The figures don't include the potential impact of the contaminated milk scare which made international headlines in August.

Due to the decline of dairy exports, the trade deficit in New Zealand grew to $981 million or NZ$1.2 billion for the month of August. This is the biggest trade deficit for the country in five years. Exports slumped to their lowest since Sept 2012 as dairy exports were down 1.8 per cent.