Dairy investment boom on horizon

Australia has minimal capacity to fill the huge appetite for food by developing Asian nations, according to the office of Agriculture Minister Barnaby Joyce.

Australia has minimal capacity to fill the huge appetite for food by developing Asian nations, according to the office of Agriculture Minister Barnaby Joyce.

MAJOR new dairy industry investments across south-west Victoria are expected to be announced within months as international companies set up processing plants for rapidly-expanding Asian markets. 

It will bring a multi-million-dollar spending boom as new operators enter the region,  which already supplies two billion litres of milk a year — almost a quarter of Australia’s output.

Earlier this year Canadian company Saputo spent $519 million buying Warrnambool Cheese and Butter, while in recent months Fonterra announced a $30m expansion at Cobden and Murray Goulburn a $19m upgrade at Koroit.

“Councils are fielding inquiries almost daily from companies wanting to establish a presence in the region,” Great South Coast Group chairman Cr Chris O’Connor told The Standard.

“Our feedback is there is an imminent large investment wave at all levels from farms to production facilities for value-added dairy products.

“The demand for further milk supply from farms will be overwhelming in the next two years.”

When asked if he could identify where investment inquiries were from, Cr O’Connor said it was confidential information, but predicted some investors would become public within months when permit applications were lodged for construction.

His comments confirm a shift from the previously-touted Asian food bowl concept to an emphasis on clean, green quality products.

Agriculture Minister Barnaby Joyce’s office last week told a Great South Coast Group deputation Australia had minimal capacity to fill the huge appetite for food by developing Asian nations.

Instead, Australia’s focus was now on marketing its agricultural output as premium products of which the south-west had an integral role.

Cr O’Connor said the region’s existing processors had already demonstrated significant marketing success in extracting high-value dairy products for niche markets.

“On a volume basis Australia is only a blip on the global radar and our market share in China has fallen,” he said.

“Senator Joyce’s office has reinforced the theme which has been coming through that Australia does not have capacity to be the Asian food bowl, but rather to concentrate on our clean, green quality.”

Winslow dairy farmer Jock O’Keeffe, who co-spearheaded the Farmer Power movement amidst a crippling price slump last year, said new investments would be a welcome boost to industry confidence.

However, it must be sustained and generate higher payments for farmers to expand their herds to meet extra demand from processors.

“Farmers are still making up for last year’s losses,” he said.

“It seems part of the reason new companies are taking an interest in the south-west dairy is because Farmer Power made a big noise.”

Smartphone
Tablet - Narrow
Tablet - Wide
Desktop