A stoush is brewing in the quad arena in Australia.
He says Australian dairy farmers are facing one of their most challenging years in decades.
Australian consumers, like Kiwis, are hooked on the fresh milk philosophy and aren’t big users of UHT milk.
To supply the fresh milk market, most Australian farmers split calve to ensure fresh milk supply all year around.
Norco Dairy chairman Greg McNamara says the average Australian drinks 300ml of fresh milk daily; this requires a consistent supply of milk year-round.
“So you need a pool of milk to service the fresh milk sector,” he says.
Norco is a major player in the Australian fresh milk sector; fresh milk and ice cream make up two-thirds of its business.
McNamara believes the fresh milk market must be protected but acknowledges it comes with increased cost structure.
“There used to be a theory in Australia that there was always enough milk to supply the whole Australian market.
“The problem that theory has is the distance to cart [fresh]milk along the Eastern Seaboard from Melbourne to Cape York is a long distance for milk to travel and you cannot get fresh milk there easily.
“What we need in Australia are pools of milk to supply the market; Victoria, NSW and Queensland have pools to service those markets.
“It doesn’t work for Victoria to produce all the milk and truck it to the top end of Australia.”
It’s not productive to send trucks of fresh milk daily around the vast country.
But for farmers to produce milk year-round for the fresh milk market theirs is a additional cost.