Synlait Milk offers suppliers a chance to earn significant premiums in US infant formula deal
Synlait Milk, the Canterbury-based dairy processor, has announced a new partnership with US baby products manufacturer, Munchkin Inc, that could offer its 161 farmer suppliers a chance to earn well above the normal payout. Munchkin, a privately-held Californian company known for designing, manufacturing, and distributing innovative infant and toddler products, is planning to launch a new Grass Fed branded retail-ready infant formula into the United States and China that will be manufactured exclusively by Synlait. Synlait managing director John Penno said the partnership would help the dairy processor reduce its exposure to China. “We are cognisant of ensuring our infant formula business does not become overly reliant on the China market, and so Munchkin, with its focus on the United States market, is a potentially important addition to our growing portfolio of retail-ready infant formula customers,” he said in a statement. The raw milk used to manufacture the unique infant formula is subject to a new Grass Fed standard which requires cows to be exclusively grazed on a pasture and crop-based diet, with no grain feeding or feed not grown in New Zealand. Farmers will be independently audited to ensure they stick to the standard. Munchkin chief executive Steve Dunn said the company’s forecast gross revenue for the 2015 financial year was over US$300 million, and he expected the new Grass Fed infant formula business to contribute significantly to its bottom line over time. Synlait is looking for up to 25 suppliers, depending on size, to join the Grass Fed standard. The carrot is a premium for their milk, above the $5.50 per kilogram of milk solids the company has forecast as its farmgate milk price for next season. This season’s milk price is expected to be between $4.40/kgMS and $4.60/kgMS due to continued low global dairy prices. Synlait won’t reveal what that […]