Market access for SA milk
The dairy industry environment
Milk is produced in South Australia for a range of different markets.
The majority of milk produced in the traditional areas of the Adelaide Hills, Fleurieu Peninsula and the Lower River region is consumed in the Adelaide fresh dairy products market, or in cheese processing in plants near Adelaide and Murray Bridge. This market offers milk prices which typically allow a consistent level of return throughout the year, with a small seasonal variation to take account of a higher seasonal peak in spring.
Milk produced in the South East is generally consumed in commodity dairy products manufacture, with a minority of the region’s milk consumed in local UHT milk processing. This market is strongly influenced by returns available from the world markets for dairy commodities, and accordingly fluctuates with changing world market conditions which periodically affect the balance of supply and demand of product.
In 2002-3 the majority of milk from this region was freighted to manufacturing plants in the Warrnambool region.
Continued growth in milk production in the lower south east region will create a sufficient field of milk to warrant a major manufacturing plant investment in South Australia - most likely in the Mt Gambier-Millicent region.
The attraction of SA milk to processors
The South East region is regarded as part of, or an extension to the South West Victorian milk field by major dairy product manufacturers.
Milk supply from these regions of the state is attractive for dairy product manufacturers who are already involved in this region as it offers a seasonal production profile that complements milk produced in the existing South Western Victorian area.
SE Sth Au
Victoria
The different patterns of rainfall, and more reliable access to irrigation in the South East allows more year round milk production, providing a seasonal production profile which has a tendency to be “flatter” than neighbouring SW Victorian production. This provides dairy product manufacturers located in South West Victoria with the ability to achieve better plant efficiencies.
South Australian milk has also earned a reputation for its high quality.
Buyers of milk
The following dairy companies are buyers of milk
| Company | Milk usage |
| Murray Goulburn | Australia’s largest co-operative manufacturer, ships milk to its Koroit factory for use in the manufacture of dairy commodities such as cheese and milk powders |
| Dairy Farmers | Australia’s largest co-operative processor and marketer of branded consumer goods, with plants in Adelaide, Jervois and Mt Gambier, producing: fresh milk and soft dairy products cheese and whey protein by-products UHT milk |
| National Foods | Australia’s largest fresh milk processor, listed on the stock exchange, ships milk to its Adelaide and Murray Bridge plants for use in fresh milk and cheese products |
| Warrnambool Cheese & Butter factory | A farmer-owned unlisted public company, ships milk to its plant near Warrnambool for processing into cheese, whey protein by-products and a range of fresh dairy products |
| Other specialty dairy products manufacturers | Milk is shipped into Victorian plants |
Major companies are committed to future investment in manufacturing facilities to accommodate the future growth potential of the growth regions of South Australia. Such investments will be made based upon the rate of production increase that is demonstrated by these regions, and market conditions in ingredients and cheese commodities from time to time.
Future manufacturing investments
Existing dairy product manufacturing facilities located in Western Victoria are nearing their capacity limits. This offers the scope for more secure investments in milk production in the southern regions of the state as an integral part of the “south west” milk field which was outlined earlier.
The future scenarios being planned by major dairy product manufacturers include investment in manufacturing facilities in the Mt Gambier- Millicent region in the period prior to 2006, providing ready access to milk supply from the south-east, upper South East and lower Murraylands regions of the state.
Industrial precincts
Local authorities are strongly supportive of the future for milk production in the region by working to attract manufacturers. These bodies are gearing for further industrial development in this region through the development of specific industry precincts that are strategically located to necessary water and power infrastructure and milk supply.
The regional development boards and councils have collaborated to ensure a co-ordinated professional approach to industrial development in partnership with manufacturing and processing investors.
Boutique food opportunities
Future growth opportunities also include the potential for smaller or boutique production and manufacturing enterprises to capitalise on the strong tourist visitations to the region, with a linkage to the high profile wine production. Wine and specialty cheese market opportunities have been successful in a number of milk production regions, including the wine regions in South Australia.
This initiative is supported by the food industry marketing activities of the State Government under the SA Food Plan.
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Last Updated: October 31, 2007, 12:14 pm
URL: http://www.dairyindustrysa.com.au/opportunities_for_investment/market_access_for_sa_milk