Grow or else: dairy report
The WA dairy industry must dramatically increase production and boost fresh milk exports to Asia or it would not meet domestic demand by 2015, a report commissioned by Wesfarmers has warned.
Sydney-based consultants Strategis Partners and Wesfarmers chief executive Richard Goyder met Agriculture Minister Terry Redman last month to present their findings on the future of the WA dairy industry.
Strategis managing director Jay Horton argued WA's industry was so small it was vulnerable to import pressure.
He said the State Government should help develop new markets in Asia with the aim of doubling fresh milk production in WA to 700 million litres.
Mr Redman said last Friday the report offered a "fresh perspective".
Despite a growing population, WA milk production was 13 per cent lower last year than in 2000, dropping to 362 million litres.
The report argued the Government and the dairy industry must capitalise on WA's proximity to Asia and aim to export half the State's fresh milk.
"WA can become an innovative exporter and overcome the small size of its domestic market - like New Zealand did 30 years ago - with an emphasis on fresh," Mr Horton said.
He predicted the WA dairy industry would not be able to satisfy domestic demand for milk in three years, under the present situation.
Projections estimated WA's domestic fresh milk consumption would grow at 2.8 per cent a year.
"On the basis of these assumptions, fresh milk consumption is projected to be more than 400 million litres by 2022," the report said.
"Unless on-farm production increases significantly, the State will be unable to supply domestic requirements for fresh dairy products by 2015.
"Under this scenario, milk would need to be imported from the eastern states."
Waroona farmer Vern Pitter is one of a handful of dairy farmers left north of Bunbury.
He said without a big rise in retail and farmgate prices, the industry in WA could die out in a few generations.
Mr Pitter is also concerned about the massive drop in the number of dairy cows in WA, as more and more farmers sell heifers to China.
"An enormous amount of cattle has been sold off over the past few years to China, Russia and Mexico," he said.
Mr Redman said he would continue to encourage investment in the industry.
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