THE official opening of Fonterra’s new milk factory at Cobden had the company upbeat about the processing sector but offering no promises about the milk price it pays to suppliers.
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Fonterra Australia managing director Judith Swales told the opening ceremony on Friday the plant was the most advanced milk bottling plant in the southern hemisphere.
The factory’s supply of 100 million litres of fresh milk a year to Woolworths’ Victorian supermarkets had created 50 new jobs at Cobden, she said.
“The state-of-the-art plant will process and deliver around 115,000 bottles of fresh milk for Woolworth’s Victorian customers every day,” Ms Swales said.
Fonterra western Victoria manager Richard Managh said 35 million litres of the milk going to the factory was coming from new suppliers in western Victoria with 65m litres coming from existing suppliers from Colac through to Heywood.
Mr Managh said the milk prices offered by the factory were more stable than for milk going to the volatile export market and had attracted a waiting list of suppliers who produced another 60m litres.
Fonterra secured a 10-year contract to supply Woolworths before investing about $31 million to refit the former National Foods Cobden milk factory that it acquired in 2012. Australian Dairy Farmers president Noel Campbell said the 10-year contract gave Fonterra the option to provide longer-term contracts to dairy farmers.
While the Cobden plant’s opening was another positive development for the thriving dairy processing sector, Ms Swales had no cheery news about the likely closing milk prices that Fonterra will pay suppliers this season.
Fonterra warned last month of the possibility of a price step-down after 10 consecutive falls this year in international dairy prices at Global Dairy Trade (GDT) auctions. Prices have since clambered back up with a September 15 auction recording a 16.5 per cent rise.
However Ms Swales said at Cobden on Friday that “one swallow does not make a summer” and Fonterra was still analysing the market conditions.