Kiwi dairy industry readies to learn impact of South Island earthquake
The worst affected areas seem to be around the towns of Culverden and Kaikura, which suffered power and telecom outages, as well as damage to roads. Shockwaves were recorded at 6.3 in Cheviot, half-way between the epicentre and Christchurch, the island’s biggest city.
According to Charly Chai, a Singapore-based risk management consultant with a focus on the dairy industry, it is still early to measure and quantify the impact of this quake on Kiwi milk operations.
“We still don’t know if there was any damage in some of the manufacturing plants near the affected regions,” Chai said. “The transportation system is certainly an area that received a direct impact in some of the areas. This could bring dairy inland logistics complications.”
He speculated that farmers on the northern plains of South Island could face water supply issues, with possible damage to irrigation systems, while drinking water could be compromised for families, staff and stock.
“On the manufacturer level, there a few facilities located in the upper South Island, but updates from these companies are still pending,” Chai added.
Together, these outcomes could have an immediate impact on dairy supply from New Zealand, one of Asia’s biggest milk suppliers.
This shortage could in turn trickle down to global markets, though Chai expects that this will depend on how serious the final outcome is, and how Kiwi farmers and processors manage a disrupted supply chain.
“Typically, a business would have a contingency plan in place to counter interruptions in the essential needs, such as power and water,” he added.
He has also provided a break-down of the scale of the dairy businesses affected in areas hit by the earthquake:
Fonterra Kaikoura
Processes 37m litres of milk from local farms each season (245,000 litres of milk each day)
Processes the milk into 28 tonnes of cheese daily
Main export markets: America, Australia, Europe, Japan and Brazil
Fonterra Darfield (further away from epicentre)
WMP producer (instant and regular)
Milk processing capacity (peak) up to 7.2m litres per day
Two dryers that produce 46 tonnes per hour
Annual production – 220,000 tonnes
Main export markets: Africa, China, the Middle East, South America and Southeast Asia.
