Dairy: Sheep's milk brings high prices and - for now - good profits

Friday, February 29, 2008

Some regulatory exemptions and a growing market make sheep dairying attractive, but it's still a seven-day-a-week business and prone to market fluctuations

by DON STONEMAN

Third generation sheep farmer Keith Todd was a student at Guelph 10 years ago when word about milking sheep first got around. Someone asked Todd if he was going to try his hand at it.

"I said 'no bloody way,'" the 32-year-old recalls as he looks over his double-32 parlour, where four cheerful Amish teenagers are putting milkers on sheep on a late Saturday afternoon in February.

Everything changed in 2003 when BSE closed the border and the Todd farm, run jointly by Keith Todd and his father Hugh east of Lucknow in Huron County, lost its heavy lamb markets in the United States.

Now, says Todd, profits from sheep's milk are far better than from meat sales before the BSE crisis. By early March, he expects to be milking 600 ewes. Admirers refer to his operation as "cutting edge."

Todd sells his milk to Shepherd's Gourmet cheese factory near Tavistock. Owner Stew Cardiff, a former banker, is a partner in a Brussels-area farm which aims to have 2,200 milking ewes and replacement animals this summer. He started milking sheep first, then realized that the industry needed a steady and financially dependable buyer if it was going anywhere. So he bought the Tavistock plant and began to build markets. Shepherd's Gourmet cheese is now available in Costco stores.

Cardiff says that the price he pays for milk is proprietary information.

He pays more for milk with high solids content good for making cheese, but that pricing formula is proprietary as well.

Proceedings from a dairy sheep symposium held in Guelph in 2007 report that in 2007 the base price in the United States for sheep milk was $1.65 to $1.85 a kilogram. The North American price for milk is higher than in Europe, where sheep milk is priced three times higher than cows' milk and twice that of goats' milk.

Cardiff's goal is to replace imports from Europe, where cheese makers have used the same techniques for decades. The Euro kept its high value when the U.S. dollar fell, making Canadian-produced sheep milk products even more competitive. Typically, imported Romano, Roquefort and Pecorino cheeses are made from sheep's milk. "You've probably eaten sheep milk cheese and didn't even know it," Cardiff says.

Interest in sheep cheese is growing. "For the time being, there isn't enough sheep milk around," says producer Larry Kupecz, president of the Ontario Sheep Dairy Association. Kupecz worries that overproduction will follow. "Sheep reproduce quickly compared to dairy cows," he says, and the industry is unregulated.

Cardiff is by far the largest of about a dozen sheep's milk buyers in Ontario. Most plants make cheese from sheep on their own farm and a couple of others. Cardiff's plant is licensed and inspected by the Canadian Food Inspection Agency and milk is pasteurized before cheese is made.

Farms producing goat's and cow's milk are regulated under the Milk Act. Sheep dairy farms are not, says Brent Ross, communications manager, Ontario Ministry of Agriculture Food and Rural Affairs. He says that in 2006 there were 31 producers and there may be more now. Public health units inspect cheese plants buying sheep milk, but not the farms where the milk is purchased.

Provincial milk inspectors will visit if asked and take an "educational approach," Ross says. Local health units also license farmstead cheese makers using their own milk. The ability to get a permit to make farmstead cheese, Kupecz says, "depends on who your inspector is and your relationship with the municipality."

Specialty cheeses can be made from raw milk on these farms, as long as the cheese is aged for 60 days at a temperature of 2 C or higher, which kills harmful organisms, Ross says. He directed questions about possible further regulation to the agriculture minister's office.

Petra Cooper, owner of Fifth Town Cheese Company in Prince Edward County, one of a couple of new processors buying milk, chairs the Ontario Cheese Society, a promotional organization and both Kupecz and Cardiff credit her with promoting provincially-produced cheese to consumers.

Kupecz says that sheep's milk lends itself to farmstead production. "There's nothing wrong with that," Kupecz says. "The rest of the world is far more liberal with the concept of how things have to be to produce quality food."

He says that the downside of Ontario's stiff food safety rules is that they stifle innovation. "There has to be a balance there'... to encourage innovation and be sure that it is in the best long-term interest of society."

Milking sheep might seem to be a poor man's way to dairying, because there is no need to buy a share of the market by buying quota. But Cardiff estimates that installing an efficient parlour, putting up feed and building

a decent place for lambing and keeping young stock will cost half a million dollars over and above land costs.

Cut corners and either milk production will be compromised or labour becomes onerous, he warns.

Cardiff says that it takes 300 milking ewes to provide a living for a family. Whether it involves sheep, goats or cows, dairying still means milking animals seven days a week.

Todd adds that milking sheep requires more labour than goats, because udders of high producers require massaging to let their milk down. Breeding pressure will fix that eventually, he says, adding that he plans to import new stock from Europe this summer. He figures that he can increase efficiency in the parlour by doubling the number of milking claws.

Kupecz says production last year in Ontario was one to two million litres.

Is milking sheep better than cows? While supply-managed cow dairying is expensive to enter, " it has a fighting chance of being profitable," Kupecz says. Like most aspects of agriculture, Kupecz says: "Unless you regulate it, it will always come back to the point of being unprofitable."

The goat milk market crashed from oversupply five years ago, Cardiff says. He plans to grow his cheese market and milk supply slowly and carefully.

Tom Kieffer and Dan Guertin of the Wisconsin Sheep Dairy Co-operative in Strum, Wis., told a dairy sheep symposium in Guelph last fall that there are about 100 sheep dairy farms in North America, the same number as five years ago. Only about 30 per cent of operators stay in the business after five years.

At a similar international seminar in 2006, Kieffer and Guertin sought participants for a benchmarking study on sheep dairy costs. While more than 20 farms indicated an interest at the time, only four farms submitted the information that was requested.

Kieffer and Guertin concluded that, if farmers are going to be profitable, they need to know what it costs to produce milk as well as what they are going to get for it. BF