Freedom scrambles to sign new milk co-op

22 Dec, 2017 06:55 AM
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Northern Victoria’s newly-formed Mountain Milk Co-operative (MMC) has been signed up by fast expanding processor Freedom Foods in the latest stage of a busy recruitment drive.

Freedom’s thirst for more milk for its Shepparton plant has also seen it recruit new farmers – and about 50 million litres a year of extra supply – from Victoria’s Goulburn and Murray valleys and the NSW Riverina in the past six months.

The new Kiewa Valley co-op, which formed in October, will initially provide a further 20m litres a year.

That’s likely to be the full production capacity of the Crosthwaite, Glass, Holloway and McKillop families who currently make up the co-op membership, although they have not signed an exclusive supply commitment to Freedom.

However, Freedom Foods is tipping its domestic and export market needs could result in the new partners supplying up to 30m litres to Shepparton by late 2018, and more in 2019.

Freedom took full control of the processing site in early 2017 after initially building the Pactum Dairy Group factory in 2014 a joint venture with Australian Consolidated Milk, which continues to be a significant supplier to the plant.

Freedom Foods is Australia’s largest producer of ultra high temperature (UHT) treated milk, also processing milk in Sydney.

Mountain Milk co-op is based on five farms, south of Albury-Wodonga milking about 2400 cows and currently sending about 18m litres a year to Murray Goulburn’s Kiewa and Cobram plants, and Parmalat.

The new co-op was registered soon after Canadian dairy giant Saputo launched its $1.3 billion plan to buy Murray Goulburn’s (MG) processing assets.

The farmer group wanted the chance to build a stronger, direct link with consumers.

“This is an inspiring partnership with huge potential and will provide us with premium milk from one of Australia’s most efficient and historic dairy regions,” said Freedom Foods managing director, Rory Macleod

“Our agreement ensures Mountain Milk’s founding farmers achieve a fair and competitive farmgate price, strengthening their ability to continue to develop and invest in their businesses.

Freedom’s own branded milk products and contract packed lines sell domestically, in Asia and the US.

The company’s UHT business has blossomed in the past year.

In October it forecast output from its various long life (UHT) packaged beverage lines would likely jump almost 200 per cent in the next two years.

Its UHT dairy volumes are set to exceed 150m litres in 2017-18 – up from 85m last year – and by 2018-19 production is set to hit 240m litres.

While many processors, including MG, have redirected scarce milk supplies to other production lines or scrapped upgrade plans for their own long life milk lines, Freedom has emerged in the box seat to meet rising UHT sales locally and in Asia.

Its Shepparton plant will also be the base for the company’s move into dairy nutrition formula powder and related new products, working in tandem with a new Ingleburn plant in Sydney.

The company also has food plants in Melbourne, Sydney and Leeton, and a grain mill at Darlington Point.

Mountain Milk’s chairman, Stuart Crosthwaite, said the farmer group aligned with the Freedom’s Foods vision to “make foods better” and believed the partnership was “a great opportunity for Mountain Milk to demonstrate how milk from this beautiful region can contribute to highest quality food outcomes for consumers”.

Mr Macleod said the Kiewa Valley was recognised as a source of premium milk products.

“It is a great fit with Freedom Foods.”

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Andrew Marshall

Andrew Marshall

is the national agribusiness writer for Fairfax Agricultural Media

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