Cream of Aussie milk producers spying export potential

November 25, 2013
News Corp Australia

REINVIGORATED milk producers are emerging from the $1 a litre milk wars by creating specialised dairy lines to cater for growing Asian appetite for Aussie food.

Handmade organic and artisan cheeses, gelato and ice cream are just a few “clean and green” dairy products, adding to existing high-demand exports such as infant milk powders.

Food manufacturing, including dairy products, will be one of the top five new exports set to drive Australia’s economy over the next five years, according to a report released by IBISWorld last week.

Australia is expected to generate $317.6 billion in export revenue in 2013-14. Our high food standards and quality ingredients are the driving forces behind export growth in emerging markets, including our Asian trading partners, IBISWorld’s Karen Dobie said.

“Revenue for dairy product manufacturers is forecast to grow by 2.1 per cent to reach $12.8 billion,” she said.
“Dairy product exports are expected to rise by 5.2 per cent per year, with milk powder and cheese exports performing particularly well.”

Domestic and international players are fighting to position themselves to supply these export markets with Australian dairy products, as can be seen in the bidding war for Warrnambool Cheese and Butter.

While the bulk of the sales will be from major manufacturers, artisan, organic and “single origin” producers are also exploring export opportunities.

While Organic Dairy Farmers Australia supplies Woolworths with True Organic milk and its own Organic Dairy Farmers label, it is about to launch a specialist cheese in conjunction with a French-born cheesemaker.

While it is early days Organic Dairy Farmers’s Richard Furphy said the growing demand, particularly in China, had resulted in supply of specialist dairy products.

“We will always be niche but it is still a good opportunity,” he said.

“We are certainly surprised just how sophisticated that these markets are becoming.”

Mr Furphy said he had been contacted by an Australian in China who had invested in a speciality food shop and was now searching for expensive, high-end dairy products.

“Who would have thought Australia would be shipping a $50 a kilo wheel of cheese to Beijing?” he said.

There was also a request to supply Australian milk for a home delivery service for residents in Beijing and Shanghai.
Organic Dairy Farmers Australia and it’s co-operative group of farmers, has also just invested in a butter plant in Camperdown, Victoria.

Organic Dairy’s CEO Bruce Symons said while they currently export small quanitites, they understand the opportunity is there.

“We are noticing growth of quite sophisticated markets in China and parts of Soth East Asia where retail consumers are willing to pay high prices for imported dairy goods because of the perceived quality and health benefits from highly regarded, clean producers like Australia,” he said.

Export potential
* Norco, a co-op of NSW and Queensland dairy farmers has sent its first batch of fresh milk to China to test the market.
* Organic Dairy Farmers Mousseron cheese by third generation French cheesemaker Matthieu Megard made with milk from jersey cows from around the Great Ocean Road, Victoria.
* Chris Melville manages Aussie Farmers Dairy in Camperdown in Victoria’s Western District. He works with 40 dairy farmers to supply national online delivery service Aussie Farmers Direct.
* In the Adelaide Hills, SA, Udder Delights husband and wife Saul and Sheree Sullivan offer goat cheeses, premium Cremeux cheese plus Divine Dairy French cheeses using their own organic goat and cow milk.
* The Pines Dairy in Kiama, NSW is a fifth generation dairy farm run by Kel Grey and wife Mahlah. They cut their supply to a dairy co-op and now sell milk from Holstein cows direct to the public and are soon to supply gelato to a new local gelataria.
* Family company Harry’s Ice Cream, in Brunswick, Victoria specialises in ice cream, with milk and cream from Holstein cows supplied by Kyvalley Dairy in the Goulburn River Valley.