ATM - A2 Milk Corporation Limited

[Joshuatree]

Nor am i , great marketing opp though.

[couta1]

this is huge problem for a2 if the cull gets even bigger , less supply bad bad bad .....

Tut Tut bull, more mischief making. The normal annual cull is around 1 millions cows a year, so cull to date is completely insignificant and can be adjusted to allow for this problem ie count the diseased animals as part of the normal cull.

[Sideshow Bob]

I don't see MB as a major for A2 (but is a concern regardless). It is in almost every other country in the world, including Australia - and farmers manage it, culling at any sign of the disease. No threat to human health.

I would doubt if the outbreak would have a disproportionate effect on A2 suppliers, and think they would be probably more immune - sourcing their cattle/semen through more regular sources, rather than traded stock. With the initial main outbreak in South Canterbury, they were centered around cattle from a large multi-farm operation, from what I understand were aligned with Oceania Dairy. Wouldn't think A2 farmers would be buying cows/calves from such sources - ie would need to know they were A2 and probably confirmation of breeding possibly.

The MOST concerning aspect though is MPI's response. There have long been doubts on their ability to handle biosecurity breaches, and this has perpetuated such doubts. My understanding is that they knew about the first case late 2015 in Southland, and now they have the police involved trying to find the source. That is over 2.5 years ago, and they should have had a blitzkrieg on the disease then, and had the police on the job, if that was the way they wanted to go.

It has also shown NAIT to be a failure, both from a organizational/system basis, but also from farmer buy-in - and as a generalization, farmers have been much too casual/lax on it, rather than looking for the benefits of it.

If we got a FMD outbreak or similar, then would be extremely serious and would have to question preparedness and response for such an event. Even though lining up production in Australia and other markets for fresh, that would put very serious pressure on A2 and its share price (and the whole NZ economy).

[Sideshow Bob]

No stopping the infant formula business in Australia - production has doubled in the last few years.

https://www.nutraingredients-asia.co...FJ1kxsPWkZ&p2=

[bull....]

Tut Tut bull, more mischief making. The normal annual cull is around 1 millions cows a year, so cull to date is completely insignificant and can be adjusted to allow for this problem ie count the diseased animals as part of the normal cull.

no guarantee the cull will eradicate the disease , if it spreads more culling will decrease the milk supply. isnt a2 cows mainly in sth island where most of the disease is?

[44wishlists]

A reminder that the deal between Fonterra and A2 signed in Feb. A2 milk will ALSO be sourced from Australia. Unless there is also a massive outbreak of MB in Australia, otherwise, I would be more concern (only if I really want to concern just for the sake of concerning) over SML than A2 at present.

[bull....]

Im getting the idea behind all the heavy short selling now

[minimoke]

no guarantee the cull will eradicate the disease , if it spreads more culling will decrease the milk supply. isn't a2 cows mainly in sth island where most of the disease is?

Once again some context. 150,000 cows to be slaughtered over 1 - 2 years.

Currently 4.2m cattle slaughtered annually which includes 1m dairy cattle.

142 farms are likely to be depopulated in next couple of years. Growing to 192 over 10 years. There are 20,000 beef and dairy farms in NZ.

While I appreciate the lost to the individual herd owners I am at a loss to understand what the overall fuss is all about. Its really a matter of herd health and management. Something farmers deal with all the time. Something MPI deals with all the time. or supposedly deals with.

As a positive we should be able to look forward to cheaper beef on our supermarket shelves - but reality overall numbers are inconsequential.

As an aside I expect Synlait (and consequently ATM) to already have in place robust herd management processes - they dont want any A1 slipping in. So no impact there.

[Ggcc]

Im getting the idea behind all the heavy short selling now

I think short term you are correct and off course you need to be careful when investing someone else’s money into A2. Especially if you are trying to find the low entry point. Long term this company is a no brainer if growth still happens in these 50% amounts per annum. So both of you are correct problem solved 😊

[bull....]

Once again some context. 150,000 cows to be slaughtered over 1 - 2 years.

Currently 4.2m cattle slaughtered annually which includes 1m dairy cattle.

142 farms are likely to be depopulated in next couple of years. Growing to 192 over 10 years. There are 20,000 beef and dairy farms in NZ.

While I appreciate the lost to the individual herd owners I am at a loss to understand what the overall fuss is all about. Its really a matter of herd health and management. Something farmers deal with all the time. Something MPI deals with all the time. or supposedly deals with.

As a positive we should be able to look forward to cheaper beef on our supermarket shelves - but reality overall numbers are inconsequential.

As an aside I expect Synlait (and consequently ATM) to already have in place robust herd management processes - they dont want any A1 slipping in. So no impact there.

no one really knows where the cull will go and how far , but assumptions on growth for a2 are very strong and fully factored in share price i reckon so any hiccupp to the forecasts will be punished very bad hence why all the short selling probably people hedging there bets going forward