Tasmanian Dairy Products

Tasmanian Dairy Products

 Tasmanian Dairy Products (TDP) operates a state-of-the-art, $80 million milk processing facility at Smithton.

 It produced its first milk powder at the Smithton plant in mid-September 2012.

 Since then, full cream milk powder, skim milk powder and anhydrous milk fat have been produced at TDP for export to the Middle East and Asia.

 There is a growing international demand for high quality dairy products and Tasmania is becoming increasingly recognised in the international market as a high quality supplier of dairy food ingredients.

 With processing capacity of between 250 million and 300 million litres of milk per annum, TDP has the potential to produce up to 40,000 tonnes of dairy product.

TDP_2

 Milk is being supplied to TDP by more than 70 dairy farms (most of which are located within 50 kilometres of the processing facility).

 While much of its operations are automated, it employs 40 people, the majority of whom have been recruited from the local area.

 TDP’s majority shareholder is the Murray Goulburn Cooperative (56.1 per cent), which also owns a UHT milk-processing facility at nearby Edith Creek.

 Japan’s Mitsubishi Corporation has a 24 per cent stake in the company, with the balance (19.9 per cent) held by private Tasmanian investors.

TDP_3

 

Get Into Dairy

Over the past 10 years milk production in the Tasmanian Dairy Industry has continued to grow. There has been a 19.5% increase in production compared to a national decrease of 15%. Tasmania is the only State of Australia to show growth. This is based around sustainable farm management practices, efficient on farm production systems and a relatively favourable climate for pasture based dairy farming.

The Tasmanian dairy industry produced a record 722 million litres of milk off approximately 450 dairy farms in 2010/11. 2011/12 has been a good production season and the expectation is for something close to a 10% increase for the year to reach 790ML. Tasmania now produces just under 8% of the nations milk.

The Tasmanian industry has the potential to development further with milk price holding well, favourable climate and in continued access to water for irrigation, land for new dairy development and recent announcements of expansion in milk processing capacity . There is scope for investment in current dairy farms, for new dairy farm conversions and for additional processing capacity.

The new Tasmanian Dairy Products factory in Smithton plus Lion Drinks (formerly National Foods) plans to invest in their Burnie cheese manufacturing facility should see an increased demand for milk production off farm by some 35% over the next 4 years to 2015.

 

A Snapshot of the Tasmanian Dairy Industry

Each year, Dairy Australia surveys a proportion of Tasmania's dairy farmers as part of Situation and Outlook.

This factsheet outlines the results of the 2011 survey.

The region's status

  • There are 430 dairy farms in Tasmania.
  • Total milk production for the region in 2011/12 will reach approximately 800 million litres (up 8 per cent on last year). This is 8 per cent of national milk production.
  • The estimated value of farm milk production in 2011/12 from the region was around $340 million.
  • Milk prices are driven by the annual price offered by Fonterra which collects the majority of milk in the state. This drives prices offered by a number of other regional processors of cheese and fresh dairy products.
  • Major companies operating in the region include Fonterra Australia, Cadbury and Lion Dairy and Drinksn. Milk is mainly used in cheese and powder production for export, as well as fresh dairy products.
  • The industry directly employs 1,900 people in the farm sector and 800 people in the processing sector.

  Click here for 'Dairy in Tasmania, Regional Profile for Dairy 2011: Situation and Outlook (Dairy Australia)'

2011 Situation and Outlook Report - National key points:

  • Opening prices for 2011/12 announced by manufacturers should be stronger than last years’ openings for southeast Australian dairy farmers. This full year price is forecast to be in line with the current season, with an average price range of $5.10 and $5.50 per kilogram for milk solids.
  • The 2011 National Dairy Farmer Survey found farmer confidence had not increased significantly on the previous year. Of the farmers surveyed, 69 per cent are positive about the future of the national industry – a four point rise over last year, while milk price was identified as the most significant challenge facing farmers.
  • While operating conditions have improved dramatically for most in the Australian dairy industry, differences in price signals and demand outlooks do highlight significant regional variations. The larger south eastern industry ― based in Victoria, the Riverina, South Australia and Tasmania ― is enjoying arguably the best conditions for a decade, with a stable international market, competition for suppliers and good seasonal conditions. While the northern and western industry are recovering from extreme weather conditions and dealing with uncertainty created by ongoing plant closures and private label milk discounting.
  • The international dairy market has enjoyed a strong price recovery in 2010/11 with the combination of good demand from the developing markets led by China and Russia and the general weakness of the US currency. For exporters however, the benefits of higher commodity prices have been offset by the strong Australian dollar.
  • Production increased in 2010/11 by less than one per cent over the previous year to deliver close to 9.1 billion litres.
Tasmanian key points:
  • Out of all dairying regions across Australia more Tasmanian dairy farmers reported an increase in production over the past year, according to the latest results from the National Dairy Farmer Survey (NDFS). As a result, average herd production increased by 10 per cent on surveyed farms.
  • Production was higher in 65 per cent of surveyed farmers herds compared to 2009-10 which is 11 per cent higher than the national average of 54 per cent. Average herd production rose from 1.9 million litres to 2.1 million litres, while the average per cow production increased slightly from 5184 litres to 5282 litres.
  • There are issues with expansion in the region, as spring peak processing capacity continues to be tested. There would need to be further investment in processing to accommodate forecast increases in milk supply.
  • However, Tasmania remains the only dairy region in the country likely to see further investments in additional processing capacity.