ATM - A2 Milk Corporation Limited

[kiora]

Q: How much milk does NZ produce in a year?
A: Approx 20,000 million litres.

Q: How much of that milk is 'pure' A2 (i.e. the cow is homogeneous A2)?
A: Approx 30% or 6,000 million litres.

Q: How much of that 6,000 million litres is actually from certified A2 cows in A2 only herds?
A: Don't know, but lets us say 5% or 300 million litres.

Q: If the demand is there and the economics work out, like if there is a sufficient premium for A2 over non-A2, would it be possible to screen the existing herds for A2 cows and do a little cattle shuffling to increase the size of certified A2 cows in A2 only herds?
A: Absolutely.

Q: By how much?
A: Lots.

Q: Will that Satisfy Snoopy?
A: We will have to wait and see.

Best Wishes
Paper Tiger

And all these cows would be supplying milk to Synlait in Dunsandel ? the logistics management would be interesting

[winner69]

share price off to a flying start for the week

so 9 bucks in next day or two

[couta1]

share price off to a flying start for the week

so 9 bucks in next day or two

You'll be encouraging your mates down at the bowling club to buy in aye winner, I mean they are sure to make heaps on this one.

[winner69]

You'll be encouraging your mates down at the bowling club to buy in aye winner, I mean they are sure to make heaps on this one.

They bought in early this month so didn’t doom atm to the has beens

They cut their losses on comvita to do so .....so that turned comvita around big time.

[sb9]

They bought in early this month so didn’t doom atm to the has beens

They cut their losses on comvita to do so .....so that turned comvita around big time.

Gosh, even for myself as true believer in this company the price assault over past weeks been relentless and unabated....

[Sideshow Bob]

Gosh, even for myself as true believer in this company the price assault over past weeks been relentless and unabated....

Just had another look and just jumped another 12c from 20 minutes ago. The Aussies have just woken up for the week.....

[see weed]

Is that your 60k buy order couta 8.78?. 8.79 now

[couta1]

Is that your 60k buy order couta 8.78?. 8.79 now

Very funny, but no I wouldn't touch it with the length of a milk tanker. PS-You had better start buying your HLG back while they are still cheap.

[see weed]

Very funny, but no I wouldn't touch it with the length of a milk tanker. PS-You have better start buying your HLG back while they are still cheap.

Another 5 weeks + before ex div. 5 weeks a long time and lots of milk under the bridge before then.

[Snoopy]

Q: If the demand is there and the economics work out, like if there is a sufficient premium for A2 over non-A2, would it be possible to screen the existing herds for A2 cows and do a little cattle shuffling to increase the size of certified A2 cows in A2 only herds?
A: Absolutely.

I know that 'A2 Platinum' infant formula is a very lucrative product for the A2 milk company. But how lucrative is it for farmers?

If this 2015 reference is in any way current, not a lot more lucrative.

http://www.scoop.co.nz/stories/BU150...r-interest.htm

"A2 Milk pays a premium of around 5 to 7 percent to its small number of farmer suppliers in New Zealand, Australia, and the UK, which has become more attractive as the farmgate milk price for standard milk has dropped markedly this season."

The converse to this statement is that the premium for A2 becomes less attractive if milk prices rise (as is the case now).

From this forum, talking about trying to buy an A2 cow.

https://www.lifestyleblock.co.nz/for...n-a2-dairy-cow

"LIC charge $22.50 + GST for the test, though there is also the cost for collecting the blood/tissue sample, and there is a 6 week turnaround."

So the question is, does the premium offer price compensate for the A2 test and all the ancillary downstream costs? For one farmer, on one farm the answer is 'no' as the cost of duplication of stock handling and separation of herd facilities is too great. But what is the situation if the farmer wants to sell their cows outright?

If only one in three cows is fully A2, then the average test cost will be 3x $22.50 + GST (because you don't know if the cows you test will be A2 in advance). So that is $75.94 per A2 cow, on average. To test 100 cows would cost $7600, plus the collection fees. I reckon you would be doing well to get a vet to do this for 100 cows for $2,400. So round figures, we are talking $10,000 for 100 cows to 'do the test', and get 33 pure A2 cows identified.

Then say the premium milk price offered is 7%, and an A2 cow is worth 5% more as a result. At $2,300 per A1 cow, that would suggest an A2 premium of $115 on the A1 cow price. Over 33 cows this adds up to $3,795. So our farmer doing the 'cow swap' might expect a $3795 payout for 33 cows, after incurring costs of $10,000. And that means the farmer selling the cows would be looking at a 'net loss' of:

$10,000 - $3,795 = $6,205!

This is without including transport costs or stockyard fees. So to me the economics of 'cow swapping' look unviable, which is possibly why I have never heard of a farmer who has done it! Still a great many investors in ATM believe it is going to happen. Go figure!

SNOOPY