EARLY figures suggest the South Australian Dairyfarmers’ Association plan to stabilise the industry’s future with its SADA Fresh milk brand is off to a strong start.
Sales figures from Coles chief operating officer John Durkan for the new product - being sold exclusively by the supermaket for 12 months - indicate customer demand for it trebled over that of other new products introduced at the same time.
“Indications from about 50 stores in SA also show that it was popular across Adelaide and regional areas, with Gawler selling more than any other store in the state,” he said.
For every litre of SADA Fresh sold, 20 cents will be allocated to a new fund to finance projects aimed at maintaining the viability of SA’s dairy industry.
The fund will be run by a separate board appointed by SADA and made up of directors selected for their expertise.
Parmalat is processing the milk - sourced only from SA farms - at its Clarence Gardens factory.
Mr Durkan, SADA president David Basham and SA Agriculture Minister Gail Gago launched the milk last Friday at Coles’ Rundle Mall store in Adelaide.
Mr Basham said early sales of the product had been promising with at least four stores selling out last weekend.
“It has been received extremely well by consumers and farmers, with positive comments coming from everywhere,” he said.
But questions are being asked about the details of the funds.
The money raised by SADA Fresh could be spent on “nearly everything” on the proviso that it benefited SA dairyfarmers.
“We get a lot of engagement from Asia, particularly China, wanting to invest in SA infrastructure in Australia to process milk to meet their requirements”, Mr Basham said.
“But we’re not able to actually give them the information they need to look at SA as an option and normally they end up going elsewhere.
“For instance, at Shepparton, in Vic, Australian Consolidated Milk and Freedom Foods Group is building a $40 million factory to produce UHT milk for the export market.
“If we had had the resources we could have attracted them to SA.”
He said SADA’s deal with Coles - initially the idea of chief executive officer Ken Lyons, Mr Durkan and Family First MLC and Mount Compass dairyfarmer Rob Brokenshire - would not only benefit Parmalat suppliers.
“The company was not the first processor we approached to do this,” Mr Basham said.
He believes the concept is a far better way to raise money for the future, rather than a traditional research and development levy for a project to conclude that farms need to get bigger and more productive.
And that is not an option for David, who is only a small producer milking 180 cows on 110 hectares - highly sought after by the lifestyle real estate market.
“A levy like the one from SADA Fresh will raise funds without negatively impacting on us,” David, who farms with son Ben, said.
“We’ll have to wait and see if consumers are interested in salvaging the dairy industry.”
The family had previously considered selling up to move interstate to the Vic’s Western District, or southern NSW, where power was far cheaper than SA.
“Value-adding products to increase profitability is a start,” he said.
“But a lot of things can still be done.
“In NSW, they subsidise variable speed vacuum pumps, which gives you a gain in a lower price of power.
“That might be another thing the money raised by SADA Fresh could be used for - and lobbying the state government to be more supportive than destructive.”
Meadows, SA, dairyfarmer Greg Edmonds says his initial reaction to the news of SADA Fresh was one of scepticism.
He is unsure whether Parmalat suppliers will benefit more than other dairyfarmers, but concedes there could be positive outcomes in the deal with Coles.
Mr Edmonds says South Australian Dairyfarmers Association is trying to do something to secure the industry’s future.
But he says if companies such as Parmalat can find 20 cents a litre to give to SADA, why can’t they find 20c/L more to give to farmers?
“If every litre of milk had 20c/L more going to towards the farmer it would solve a lot of problems,” he said.
Greg, who milks 120 stud Ayrshire cows year-round, supplying about 600,000L a year to Warrnambool Cheese & Butter, said he would support a state dairy plan -but where it would end up, he doesn’t know.
“Farmers are getting older, land is getting too dear and farmers are still getting out with not too many new farms starting up,” he said.
“The future of the industry relies on the export market so I think getting more of those markets overseas is the way to go.”
Mr Edmonds praised those with the passion for trying to secure SA dairy’s future.
“They’ve got the industry’s best interests at heart and are trying to do their best for it,” he said.
“It’s great something is being done and it’s good to have people like that who are passionate about the industry.”