Fonterra chases milk
FONTERRA Australia announced at its recent supplier meetings in Gippsland that it is seeking to grow milk volumes by at least 100 million litres next season to deliver on strong demand from its customer base.
“We are gearing up to grow production across the board and to ensure we are delivering sufficient volume of product to meet our customers’ needs, particularly in the Asian region,” Simon Bromell, managing director at Fonterra Ingredients Australia said.
“Our global intelligence indicates that although demand may soften a little in the short term, it is expected to recover into 2013.
“Importantly, we are experiencing firm demand from our customers, some of the world’s biggest food companies. This is the key driver behind our production expansion.
“We’ll be focusing on the products that enable us to deliver strong superior returns to our farmer suppliers, and which leverage Fonterra’s dairy expertise and strong customer partnerships.
“China is a key export market for us. It is already the single largest importing country in the world, and will need a substantial supply increase to meet the demand growth that is projected over the next decade.”
Since 2009, Fonterra has shipped more than 100,000 tonnes of paediatric powder products from Victorian manufacturing sites, achieving 37 per cent growth in this export category.
“It’s a fantastic opportunity and Fonterra, with our strong sales network in China developed over the last 40 years, is well placed to make the most of it,” Mr Bromell said.
To foster this milk volume growth, Fonterra has reiterated commitments around delivering competitive farmgate milk prices and financial incentives, supporting cash flow on farm, and providing a diverse range of on-farm support services to support farmers’ ability to grow profits through volume and milk quality.
Leongatha South dairy farmer George Occhipinti is sceptical that the increase in demand from the Fonterra factory will benefit his farm.
“Most South Gippsland farmers are probably already running at peak; cattle can only produce so much. We are already paying increased feed prices and the rest,” the Fonterra supplier said.
“This announcement will not influence the way I do anything as it costs more money to produce more milk, yet the increase in farmgate price is unlikely to be significant.
“I have always been with Fonterra (formerly Bonlac); I have stayed with the factory regardless of the milk prices.
“I don’t think they take any individual farmer’s circumstances into consideration. We are all treated the same, so I don’t pay too much attention to it all.”
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