ATM - A2 Milk Corporation Limited

[Ginger_steps_]

west coaster and ginger steps:

I'm sure you won't find any lab offering to test the a1-a2 status of a cow for $1. The main tester in NZ is GenomNZ, part of AgResearch. It doesn't advertise the cost of its A1-A2 tests, but I've seen quite a lot of net traffic mentioning costs of around $20 per cow, including for offshore cows. In the US, the University of California at Davis does it for about $25. That comes to quite a high cost to test a full herd, but if a farmer has got good breeding records of his cows he would be able to rule out quite a few of his stock without testing, based on details of its parents. Suppliers of bull semen provide info about its A1-A2 status. It's possible that Synlait helps its suppliers with the cost of testing - I just wouldn't know.

Most of NZ's top breeding bulls now are pure A2 because they're in the most demand. That's partly because A2 cows have a reputation for good milk output, and partly because smart farmers are reading the writing on the wall, that A2 is the way to go even though Fonterra is still refusing to endorse that view. Read Keith Woodford's blog articles on this, including the most recent at

http://www.interest.co.nz/rural-news...ite-nz-science

which will be making a lot of farmers switch to A2 if they haven't already. In addition to the cost of testing his cows, there are also other costs if a farmer wants to convert his herd quickly to all-A2. For example, he needs to dispose of cows or calves that are not A2A2 and replace them with ones that are.

Thanks NT - $1 did sound a bit too good, but perhaps there is some subsidy there from synlait / a2. I guess even at say $25 the price premium should pay the cost back in under a year.
Also, another good article from old Keith - I wonder how many farmers actually read his articles?! Hopefully the word filters through in good time - we need more a2 milk, and we need it yesterday.

[NT001]

Another very interesting analysis of the dairy sector by Keith Woodford, which once again would seem likely to make farmers hasten their herd conversion to A2.

https://keithwoodford.wordpress.com/...urn/#more-1404

First, many farmers will be looking more closely at ways to earn more for their milk, such as by supplying A2. They'll be aware that next year is when a2MC is likely to make a decisive move in NZ, probably acquiring processing facilities in the North Island. Even in advance of that, it is discussing with Fresha Valley (a North Island outfit) ways to increase A2 milk production.

Secondly, many farmers will be looking at ways to reduce costs, and one way is by culling their herds in order to constrain feed costs. Herd culling is a step in the process of conversion to A2 that farmers would normally be reluctant to take. Fewer cows = less milk production in the first instance. But this crisis is an opportunity for those interested in herd conversion to cull non-A2 cows, while those who are not inclined to go the A2 way can sell A2 cows for good cash prices to those who are.

A crisis such as the industry is now facing can often be the catalyst for beneficial change. It so happens that this crisis coincides with a2MC's plans to expand production in NZ, which will most likely be focused in North Island areas such as Waikato.

[sb9]

Big buying going on to be in time before the results to be announced in a day on 17th, expect more activity once ASX starts trading.

[Ginger_steps_]

Another very interesting analysis of the dairy sector by Keith Woodford, which once again would seem likely to make farmers hasten their herd conversion to A2.

https://keithwoodford.wordpress.com/...urn/#more-1404

First, many farmers will be looking more closely at ways to earn more for their milk, such as by supplying A2. They'll be aware that next year is when a2MC is likely to make a decisive move in NZ, probably acquiring processing facilities in the North Island. Even in advance of that, it is discussing with Fresha Valley (a North Island outfit) ways to increase A2 milk production.

Secondly, many farmers will be looking at ways to reduce costs, and one way is by culling their herds in order to constrain feed costs. Herd culling is a step in the process of conversion to A2 that farmers would normally be reluctant to take. Fewer cows = less milk production in the first instance. But this crisis is an opportunity for those interested in herd conversion to cull non-A2 cows, while those who are not inclined to go the A2 way can sell A2 cows for good cash prices to those who are.

A crisis such as the industry is now facing can often be the catalyst for beneficial change. It so happens that this crisis coincides with a2MC's plans to expand production in NZ, which will most likely be focused in North Island areas such as Waikato.

Just a thought. One of Keith's recent article pointed to the fact that there were very large farms in the states ready to change to a2 at the drop of the hat, one stating that they could be producing 1 million litres of a2 milk within a couple of weeks. Surely a2 would be looking into opportunities such as this to ramp up infant formula production while the iron is hot? Of course they would need to have another processing facility approved by the chinese - but surely this would be an excellent option to address current supply issues? Imagine the SP if a2 were to announce they were doubling production in 2H 16!! Keen to hear some views on why this may not be a good option?

[fiasco]

Probably assisted by Challenger taking a bigger position also. What's are the key points you're looking to get from the 17th ann sb9?

Hopefully, they provide additional context around how UK and US are performing, along with how they are going to proceed with growing supply.

[sb9]

Probably assisted by Challenger taking a bigger position also. What's are the key points you're looking to get from the 17th ann sb9?

Hopefully, they provide additional context around how UK and US are performing, along with how they are going to proceed with growing supply.

My key points from 17th announcement would be to focus on below:

- Performance for 1H trading, how much higher than earlier earnings update
- Chinese IF (infant formula) market update and how much further potential still lie in there
- US expansion plans and how they are tracking
- UK market performance and any plans to launch IF into that region

[Snoopy]

Just a thought. One of Keith's recent article pointed to the fact that there were very large farms in the states ready to change to a2 at the drop of the hat, one stating that they could be producing 1 million litres of a2 milk within a couple of weeks. Surely a2 would be looking into opportunities such as this to ramp up infant formula production while the iron is hot? Of course they would need to have another processing facility approved by the chinese - but surely this would be an excellent option to address current supply issues? Imagine the SP if a2 were to announce they were doubling production in 2H 16!! Keen to hear some views on why this may not be a good option?

Since A2 is now priced on 'exponential growth', an operation ten times the size of what we see now, a mere doubling of production in 2H 16 would cause the A2 share price to collapse. A doubling of herd size is so far below what is required from here, there would be a stampede for the exit door!

SNOOPY

[whatsup]

ATM's ann this must be good to goodest up 6% so far today to $1.95 and there is a possibility that we could hit $2.00 again !

[sb9]

Inching close to that magic $2 mark and most likely to breach that, all in anticipation of what's in store tomorrow.

[whatsup]

atm's ann this must be good to goodest up 6% so far today to $1.95 and there is a possibility that we could hit $2.00 again !

$2.00 gone !!