Following record opening prices for this year’s Australian dairy season, Devondale has piled on the good news by announcing the construction of a major new milk processing facility in Sydney’s western suburbs worth A$60m.
The Erskine Park development will be one of two new plants, announced in April, that it will use to grow its daily pasteurised milk business in New South Wales and Victoria.
Work has already started on its Melbourne processing plant, which is being built alongside Devondale’s existing integrated logistics centre in Laverton.
Construction will begin on the 100-hectare Sydney industrial park should begin soon, said Keith Mentiplay, Devondale’s operations head.
“There is just over one year to go before we are scheduled to begin production and we are well on track to becoming the nation’s most efficient producer of daily pasteurised milk,” he said.
Devondale is actively seeking to grow its milk supply in the Sydney region to support the new processing plant and officials recently held meetings with farmers in Bomaderry, Taree West and Maitland.
Mentiplay said the response at the meetings was positive. “We had the opportunity to speak to more than 300 farmers about what we had to offer.
“As a Co-operative, Devondale returns 100% of the profits from our operations to our dairy farmer shareholders.”
The news comes shortly after Devondale’s parent, Murray Goulburn, advised its dairy farmer suppliers that it had lifted the previously announced opening base price by A$0.13 per kilogram of milk solids.
Representing a 27% increase on the previous year’s opening price, the adjustment is intended to balance falls in the Australian dollar.
“As Australia’s primary dairy exporter, this recent major shift in the currency has added favourably to MG’s farmgate price outlook and allowed this increase in opening base price,” said Gary Helou, Murray Goulburn’s managing director.
“We were very pleased to have led on opening milk prices in early June with record high prices for fat and protein. This leadership provided much needed certainty for dairy farmers following a very tough 2012/13.
“We were also pleased to provide a component of our pricing as cash up front and many MG suppliers have already submitted their form to take up this option,” Helou added.
MG’s initial opening price had reflected the positive impacts of A$100m the company had achieved in operational savings, as well as higher world dairy ingredients prices and the softening Australian dollar.