MILKING ASIA
Jet loads of milk boost dairy farmers’ hopes
A MULTI-MILLION dollar factory on Toowoomba’s western fringe could trigger a resurgence in the state’s dairy industry and result in up to 300,000 litres of fresh milk exported to China every day.
The $35 million project could be a boon for the Darling Downs’ 150 dairy farmers who collectively have battled crippling milk price wars and a drop in domestic market demand.
Queensland Dairyfarmers Organisation state president Brian Tessmann said the Toowoomba Integrated Milk Project being built beside Wellcamp airport could give the industry the confidence boost needed to attract more investment and turn the tide on farm closures.
The project’s manager Larpro has flagged the potential to export two jumbo jets, or 300,000 litres of fresh milk to China each day where prices can be as high as $19 a litre.
“The thing Queensland’s market needs, and one of the reasons we have been in trouble, is we don’t have an alternative market,” Mr Tessmann said.
“. . . this could give the local farmers an alternative, a bargaining tool, and I think that could really make a difference.”
The number of dairy producers across the state has been in decline since 2000 but it was the 2011 milk price wars which ramped up the industry exodus.
Mr Tessmann said the $1 a litre price gouge by supermarkets was unsustainable and unrealistic, and had contributed to the rapid closure of hundreds of farms.
He said industry confidence was critical to reviving the industry and the Toowoomba Integrated Milk Project was a critical step in the right direction.
The project’s long-term goal is to export 300,000 litres of fresh milk to China, where growing demand for clean and safe milk can see milk retail for up to $19 a litre, along with infant formula, milk powder and UHT products.
Queensland’s remaining 420 dairy farmers produce about 470 million litres a year, which supplies about 70% of all milk consumed in the state.
Mr Tessmann conceded existing producers would not be able to meet the export quantities without major operation expansion or farmers returning to the industry.
“The problem in the dairy industry is because of the supermarket prices in 2011; we really gutted the domestic supply,” Mr Tessmann said.
“The $1 a litre price is not a realistic value on milk and what this (exporting) might do is push the domestic market back to a retail price which is more realistic.
“The thing you have got to remember is that in Queensland the industry has been copping it over the last decade and a half.
“We were the major
dairying state once and if we can get that confidence back, get a bit more of a reasonable price, then we can get the farmers back.”
The TIMP is a joint venture between Au Lait Australia and Nature One Dairy, and is under construction at the Wellcamp Business Park, adjacent to the airport.
Managed by Larpro, the project’s initial target was 30 million tins of infant formula a year but Chinese market potential via Wellcamp’s weekly Hong Kong freight flights, has seen it expand sooner into the the fresh milk industry.
Larpro Projects managing director Steve Laracy told Queensland Business Monthly the facility had the potential to supply two jumbo jets fresh milk into Asia daily.
“What sets us apart is our ability to export fresh milk in large quantities,” Mr Laracy said.
Wellcamp airport general manager Sara Hales said it was vital transport infrastructure kept pace with trade opportunities in Asia.
“Between 1985 and 2013, the cargo load tripled in Australia but during that time we did not build one extra airport,” Ms Hales said.
“We are likely to see similar growth up to 2030. The concern is that without infrastructure in place the opportunities being opened up by free trade agreements could be hampered.”