Two of Tasmania’s biggest milk processors – Fonterra and Saputo – were in the state on Wednesday to meet with suppliers and industry stakeholders.
Saputo Dairy Australia is the newest player in the Tasmanian market, with chief executive and chairman Lino Saputo jnr spending the day at Smithton and Launceston meeting North-West suppliers inherited in the Murray Goulburn sale – and courting new ones in the North-East.
During the conversations Mr Saputo said he had been frequently asked why the company set its opening price at $5.75.
“The opening price is just an indication; its the closing price that is key and fundamental, and for five years straight we’ve had the leading price at close compared to our competitors,” he said.
“Prices are challenging in the world markets, which in turn are challenging for all dairy farmers around the world, including in mainland Australia and Tasmania.”
Saputo plans to increase milk supply to ensure it is fully utilising the assets acquired from Murray Goulburn.
“The plants [from Murray Goulburn] are operating at 58 per cent. Our first priority is to increase milk intake,” he said.
“I know that’s not going to come overnight and that, with a lot of suppliers, we will have to prove ourselves. I think over the course of the next three years we’ll be able to get our plants running closer to about 90 or 95 per cent capacity.”
That aside, Fonterra Australia managing director René Dedoncker said Tasmania had even more going for it because of its “clean” reputation.
“Tasmania’s unique appeal plays out around the world, particularly in Japan,” Mr Dedoncker said.
“Japan absolutely goes out of its way to find cheddar from Wynyard, with its clean, green image.
“It’s similar in China and Korea. Everyone who does it is good for Brand Tasmania,” he said.
One reason for this extra attention to Tasmania’s clean produce, is the desire to know food provenance.
“Increasingly those consumers in Asia are using social media to find the source of products. They want to find out where it comes from,” Mr Dedoncker said.
When it comes to competition from Saputo, Fonterra welcomes the new processor to Tasmania.
“It’s good for the industry that we have another strong player in the market,” Mr Dedoncker said.
“There is enough room for all of us.”