New home found for UDP milk

A tanker from Warrnambool Cheese & Butter is now picking it up after the company swiftly contacted the 36 affected UDP suppliers and offered to match their pricing structure for the next two months.

"WCB has really stepped up to the plate and for that many people are very grateful," Mr Stacey said.

"If they can offer a competitive price they will probably keep much of this milk into next season."

"Parmalat has also been actively seeking new suppliers, which they should be commended for, but others have said they don't want any more milk or are still deciding."

Mr Stacey - who has been a UDP supplier for the past three years - received an email on Wednesday afternoon from receivers PPB Advisory indicating their intention to cease operations at UDP's Murray Bridge and Jervois facilities and giving him two days to make alternative arrangements.

He says it is a great disappointment for the SA dairy industry United Dairy Power was put into administration on Wednesday, but no great surprise.

"In June last year when they didn't pay some suppliers on time we thought something wasn't right but then they assured us the issues were behind them. As the end of the season drew closer we had been somewhat concerned but they had been paying good money for milk so everyone was pretty happy," he said.

Mr Stacey said it was very unfortunate for the 100 or so factory workers likely to lose their jobs but was still hopeful a new buyer could be found for the Murray Bridge cheese factory.

"With Murray Goulburn buying some of the equipment you would have to think it will be difficult to continue making mozzarella at Jervois, but I am still hopeful that something will happen at Murray Bridge. The plant has been difficult to sell I believe because of the entitlements owed to workers but now the receivers are dealing with this and a new operator could chose to re-open."

Mr Stacey was also nervous about the potential surplus of milk in spring from the loss of a processor.

"In the longer term it is unfortunate but the industry up this end of SA will continue to decline in volume to match the demand from Lion, Parmalat and the other processors," he said.