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Australian dairy processors continue to plan for the long term

Dairy Australia’s latest Situation and Outlook report have highlighted major developments in Australia’s dairy processing sector.

Amidst challenging conditions for Australian dairy farmers, the report highlights significant investments in infrastructure by the country’s existing processors, as well as new entrants.

Dairy Australia Senior Industry Analyst John Droppert said ongoing corporate investment points to underlying confidence within Australia’s processing sector.

“This is a very challenging season for farmers, but there is still a clear level of long-term planning being driven by Australia’s major dairy processors,” Mr Droppert said.

“Sustained investment will help to maintain the Australian dairy industry’s capacity to meet demand, especially from international markets seeking to purchase premium Australian dairy products.”

In a significant acquisition, Bega Cheese emerged as the successful purchaser of the Koroit facility in southwest Victoria, acquiring the former Murray Goulburn plant from Saputo for $250 million.

Australian Consolidated Milk’s (ACM) new Girgarre plant near Shepparton in northern Victoria continues to take shape.

The company is reportedly working towards a late November commissioning date and commercial production from April 2019.

Cohuna-based No Bull Milk Processing Pty Ltd (NBMP) has taken step towards its proposed powder and butter plant in the northern Victorian town.

In the organic milk sector, Bellamy’s Organic has entered new agreements with Fonterra, ACM and Bega Cheese (via Tatura Milk Industries) to source and process Australian organic milk.

Mr Droppert said the growing demand for niche milk products required processors to continue to adapt to appeal to consumers within Australia and in overseas markets.

“We know consumer preferences are evolving and milk processors are innovating to convert these trends to demand dairy products,” Mr Droppert said.

On 10 October, Kirin-owned Lion announced plans to divest its Lion Dairy and Drinks (LDD) unit, following a strategic review.

LDD is intended to be sold as a whole and Kirin expects the sale process to take between six and 12 months.

A full corporate sector update was published in Dairy Australia’s October Situation and Outlook report.

To access the full report, visit Dairy Australia’s website at: