Fonterra Australia managing director René Dedoncker said the company was on track to process 2 billion litres this season, a gain of 500 million litres.
Late last month, Fonterra had concerns about managing spring-peak milk in Tasmania for a two-week period, but Mr Dedoncker said a change in demand for powders would mean more milk would be needed at its Spreyton plant, which would help balance milk processing across the state.
He said there wasn’t a concern about processing the spring peak in Victoria.
In June, Murray Goulburn informed the industry it had no intention to process future surplus seasonal milk.
Processing extra milk for competitors during the peak of the milk production season was a role MG had played in the past.
Mr Dedoncker said Fonterra had the capacity to process up to 2.3 billon litres but would choose to stay at 2 billion.
He said most of the extra capacity was at its Darnum site with “a little bit” at Cobden and in Tasmania.
He said Fonterra would manage its own peak milk as well as site shutdowns.
“We need to be planning really well now because of all the changes going on in the industry,” he said.
“There was a time where there was milk swaps and activities to support peak milk that no longer exist, we have put a lot more effort into being really precise on planning and we run a weekly cycle now to understand our milk flows and impact on logistics which is both the factory it is intended for, our transportation and the whole product mix.”
Mr Dedoncker confirmed Fonterra has had no official approach from any other milk factory to process peak spring milk in the absence of MG fulfilling the role this spring.
MG confirmed today, as part of its annual results, that it was expecting to process 2 billion litres this season. This is down from the 2.7 billion litres it processed last season.
Mr Dedoncker said Fonterra had enticed about 29 suppliers back to the processor after they left in the 2015-16 following Fonterra’s slashing of the farmgate milk price.
Fonterra had also picked up 75 new suppliers, the equivalent of about 120 million litres of milk, in northern Victoria during the past month.
Mr Dedoncker said Fonterra was banking on an average milk intake increase of 3-4 per cent due to the season, with some regions such as Western Victoria and northern Victoria expected to exceed this level and Gippsland — as it has been dry — to fall below.
Source: The Weekly Times
Link: http://www.weeklytimesnow.com.au/agribusiness/dairy/fonterra-will-strictly-monitor-peak-milk-management-this-spring/news-story/330cc5912432fa325a1b968d099f3430