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Murray Goulburn invests millions at Cobram

Higher farm gate milk prices flagged as $74 million goes towards Cobram factory's consumer cheese facility.

ROB HENSON May 7, 2014 3:25am
Murray Goulburn Cobram

Higher returns for local dairy farmers are predicted as milk processing co-operative Murray Goulburn invests more than $74million at its Cobram factory.

The upgrade will replace the Cobram plant’s current cheese cut and wrap line and create larger capacity.

Additionally, $38million will be spent at Koroit and Cobram to increase capacity for production of nutritional milk powders, amid growing international demand.

Murray Goulburn managing director Gary Helou said the investment would add to already high farm gate returns this season, in turn spurring regional growth, ‘‘with the vast majority of money spent by farmers in their local communities’’.

Mr Helou said the company’s aim was to increase the farm gate milk price by $1/kg milk solids by 2017.

Waaia dairy farmer and Murray Goulburn supplier Margaret Cockerell welcomed the price target but wanted more than a dollar rise in the next three years.

‘‘To not go backwards (on farm gate price) would certainly be a big advantage — traditionally we go up then go back down again (in prices) over the years,’’ she said.

Dairy Australia industry analyst John Droppert said farm gate milk prices were at ‘‘near record’’ levels, compared to prices ‘‘at their worst’’ last year.

Mr Droppert said part of the strategy behind the investment announcement was to boost confidence among suppliers.

‘‘That volatility between worst prices last season and best prices this season, year to year, has an impact on farmers wanting to make their own investments,’’ he said.

‘‘Murray Goulburn’s investment would be about allaying those fears and to prove they’re there for the long-term.

‘‘The way (Murray Goulburn’s) investments are being explained is lowering the cost of production and taking costs out of the supply chain, from the farmers’ point of view.’’

Ms Cockerell said while many producers were confident of the dairy industry’s future, many were still struggling with debt payments from the drought and were limited in terms of their on-farm investments and increasing productivity.

‘‘At the end of the day we need a lot of farms to increase per cow production,’’ she said.

Mr Droppert said another key driver behind the investment was competition at the farm gate, which would likely increase in the future.

He said cheese production was a steady market, while milk powder and infant production was surging ahead, particularly in regards to China.

Federal Member for Murray Sharman Stone said the announcement was ‘‘great news’’ for dairy farmers, the region and Murray Goulburn employees.

‘‘Murray (electorate) has a fantastic farming region especially in the dairy sector,’’ Dr Stone said.

‘‘These $127million of investments into the company’s factories show Murray Goulburn’s faith in the future of the local dairy industry.’’

On additional staff or construction, a company spokesperson said there was still more planning to take place, including a need for additional energy infrastructure.

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