THE sale of dairy processing factories at Murray Bridge and Jervois last year has left the Dairy Farmers Milk Co-operative (DFMC) unable to get contracts for 22 milk suppliers in the State’s south-east.
DFMC executive officer Greg Griffiths said the co-operative had been working to secure contracts for the Mount Gambier centralised suppliers since United Dairy Producers (UDP) bought the factories in October but had had no luck.
“When Lion sold the factories to UDP they said they didn’t need the milk from the south-east suppliers anymore,” he said.
“Since the announcement of the factory sale we have been trying to find supply contracts as a collective.”
Mr Griffiths said the loss of contracts would not harm DFMC and could be a good thing for dairy farmers.
“There will still be a competitive vibe in South Australia because UDP will still be looking,” he said.
“UDP need a lot of milk and will have to go out and find it - they could go direct to the farm or through another third party.”
The loss of the 22 contracts would not harm DFMC, which expect to continue in a smaller capacity.
“We still represent 60 million litres of milk in South Australia,” Mr Griffiths said. “Basically it is the Mount Gambier people we lose.
“We will still pick up their milk if they haven’t got a buyer as National Foods still have to sell for us.
“Their milk could be sold to local cheese makers to major buyers.”