A $650 million dairy industry blueprint has been drawn up by the state government to attract big investors to Western Australia.
The Department of Agriculture and Food WA (DAFWA) has put a pre-feasibility study together to provide investors with a clear path to take, which could see the local dairy industry double in size.
It has modelled a new supply chain to produce sufficient milk for a 30 000 tonnes per annum whole milk power plant and/or a 100 million litre bulk liquid milk plant, both focussed on export opportunities.
Total capital requirements for the milk powder supply chain have been estimated at around $650 million while the establishment cost of the bulk milk supply chain is around $200 million.
Kevin Chennell is the Executive Director of livestock industries at DAFWA.
He says the project will help fulfil the local farming mantra that China is a huge market for Australian agricultural products.
«What is missing is the mechanisms that you might capitalise on that market.
«The investors want to know how you can actually turn these concepts of growth and production into a reality.
«It’s one thing to have the ideas but you have to have a concrete path forward in terms of growth.»
The state’s largest dairy producer Ross Woodhouse has expressed scepticism over the plan.
«It certainly would be a challenge, currently a lot of live dairy cattle are being exported to balance the books.
«So the cattle numbers straight away is the real challenge to face.
«It’s exciting in the concept.»
Mr Woodhouse is concerned the domestic supply and demand balance will be impacted if export markets collapse.
«The export market is very fickle.
«It depends on what the long-term average export market price is as to whether its going to be good for the farming fraternity of not.»
Chinese investors have shown strong interest in the WA dairy industry in recent times but the proposed takeover of Ravenhill Dairy in the Great Southern fell through late last year.
The blueprint has been released to the major dairy processors and producer bodies in WA for their interest and comment.
Source: ABC