Farmers milk processing plan

SOUTHERN Region dairy farmers, upset by the monopoly position of Masters’ (National Dairy) milk processing facilities in Perth, are toying with the idea of setting up their own processing plant.

The Albany to Walpole dairy belt is considered to be one of the fastest growing regions in Australia in terms of milk production, although it is still relatively small compared to the South West.

The growth is partly due to several dairies from the South West relocating to take advantage of lower land prices and production costs in the Great Southern.

The Great Southern Development Commission is currently evaluating the opportunities in activities including casein production, cheese, reverse osmosis processing and UHT milk production.

The GSDC has undertaken a prefeasibility study into the dairy industry and commissioned a scoping paper.

A final report is expected in six to eight weeks’ time.

The overall message from workshops held with industry stakeholders was that producers faced an uncertain future with deregulation on the horizon and, as a result, were keen to investigate new ways of processing to achieve the highest return per litre of milk possible.

The final phase of the study will involve looking in detail at potential opportunities with the aim of attracting dairy processing investment.

The study will target niche markets, given the relative small level of milk production in the region.

According to GSDC CEO Peter Cook, the volume of milk in WA is too low to access economies of scale available to large eastern States companies such as Murray Gouldburn, Boniac and Dairy Farmers.

Together, these three companies account for about 65 per cent of the market.

“To establish a viable market for the thirty-five farmers in the Great Southern with 28 million litres of milk production per annum is not without considerable risk, given that there is, indeed, a viable segment of the market that could be accessed,” Mr Cook said.

“A new processing facility in Albany, if proven to be viable, will provide significant benefits to the region including a competitive price and secure market for dairy farmers and additional employment benefits.

“When Masters closed its Albany processing facility approximately ten local jobs were lost.

“A new facility would probably provide similar direct employment opportunities in addition to indirect opportunities in transport and dairy farm-related activities,” he said.

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