Fonterra has confirmed it will be seeking “sizeable” quantities of milk, from northern Victoria, following claims its representatives were approaching regional dairy farmers to sign them up.
But a Fonterra spokeswoman denied claims the company needed an additional 100 million litres of milk.
“We’re currently working our budgets for next season and we can’t confirm milk volumes at the moment,” the spokeswoman said.
“Demand for Mozzarella across Asia - and China and Japan in particular - is growing rapidly, with the market in short supply, so we expect required milk volumes to be sizeable.
“We haven’t yet finalised the details of next season's pricing arrangements so discussions with our existing and potential suppliers are still preliminary at this point, with no specific deals on offer.”
Fonterra’s milk supply general manager Matt Watt said commissioning of the Stanhope, Victoria, cheese plant was just a few months away, with a 50 per cent increase in capacity from the previous factory.
“To make the most of this additional capacity, we know we’ll need to be competitive across our milk pools, and particularly in northern Victoria, to retain and attract supply,” Mr Watt said.
“We’ve been talking to farmers interested in supplying us about what we can offer them and their business.
“The most important way we support our farmers is by offering a strong milk price, based on the price we can earn in the global market for their milk.”
When the new cheese plant comes online mid-2017, it will produce 45,000 tonnes of cheese each year for the domestic and export markets; enough cheese for almost one billion cheese toasties.
Waaia farmer, Tatura supplier James Dillon confirmed Fonterra was looking for more milk.
“I’ll wait and see,” Mr Dillon said.
“There are a lot of people out of contract and there will be a lot of interest, but you just have to listen to what you are being offered.”
He said he was just an “average farmer, milking 260 cows, but could increase his herd to 280, depending on what was offered".
Mr Dillon said some farmers had said Fonterra was offering “special deals” to supply the company.
“It’s always nice to see what someone else is offering,” Mr Dillon said.
But Bonlac Supply Company chairman Tony Marwood, said there were no special deals.
“Nothing has been signed off on yet, it’s common knowledge there has been a big investment, in Stanhope, in cheese,” Mr Marwood said.
“If there is anything come out if it, it will be fair for all people who supply into the Stanhope factory.
“There are no special deals, but it’s a big investment and you need full plants to make these things work.”