Industry warns of overseas milk plan threat


Industry heavyweights have hit out at a State Government scheme to attract millions of dollars in overseas dairy investment, pointing to “impossible” costings and warning of dire consequences for existing farmers.

Prepared and costed by the Department of Agriculture and Food WA, the pre-feasibility study calls for almost $850 million in capital investment to take advantage of Asia’s growing demand for milk.

The study suggests establishing 10 herds, each of 3000 cows, between Boddington and Kojonup to supply a new processing plant, likely near Dardanup or Collie, with the capacity to export up to 30,000 tonnes of milk powder each year.

Under the proposed scheme DAFWA projects a net production cost of just 21c per litre, less than half of WA dairy farmers’ average operating cost – with no disruption to the local supply chain. Brownes managing director Ben Purcell called into question both the costing of the plan and its effect on existing farmers.

“It implies milk can be produced at a dramatically lower cost than what our dairy farmers are experiencing, which on average is about 47c per litre,” he said.

“We don’t believe that what DAFWA has suggested is possible but if theoretically it is, we can’t see any way that you could stop that milk from flooding the local market.

“I know that I would be required under our governance to source the cheapest milk possible.”

WA Farmers Federation president Dale Park said the focus should be on making dairy farming profitable rather than setting up more farms.

“Despite a drop in the number of dairy farmers recently production has remained relatively stable and we already have an excess of milk available for export,” he said.

“On the processing side, the Brownes plant could easily cater for the whole of WA and there are two other additional plants in the State already.”

Get the latest news from thewest.com.au in your inbox.

Sign up for our emails