ProviCo is building a next generation bio-nutrients and functional ingredients facility at the former Nestle and Fonterra site in Dennington, south-west Victoria.
“We are up and running with the support of great people in the south-west, we have employed 60 locals at the site, and we are taking milk from local farms supplying SW Dairy Limited (SWDL),” ProviCo CEO Ben Anderson said.
“We formed a strong relationship with SWDL from the outset, like us they are growing, and we take all the milk they produce; it has been an important partnership for us.
Duncan Morris and Brad Couch are the driving force behind the SWDL cooperative.
“SW Dairy Limited recognises that a thriving dairy industry hinges on profitability, both at the farm level and in processing,” Duncan said.
“Our partnership with ProviCo, solidified by a flat price milk model based on a kilogram of protein and a kilogram of butterfat content, underscores our commitment to fairness and sustainability for our farmers.”
Brad Couch is SWDL chair and a successful seasonal dairy farmer.
“We are strong believers in the seasonal farming concept and SWDL members are like-minded farmers — by valuing our home-grown pasture milk and maintaining consistent pricing, we empower our farmers to control costs and build resilient businesses, crucial for navigating market fluctuations,” Brad said.
“We have consistently maintained competitiveness and fairness by offering our suppliers the same price, irrespective of their volumes, without any ‘special deals’ or preferential treatment.
“Our steadfast commitment has attracted a notable proportion of our suppliers under the age of 40. This is a testament to the pricing model SWDL and ProviCo have agreed upon — no spring milk discounting.
“It therefore has encouraged young, aspiring farmers to join and remain in the dairy industry ensuring its long-term viability.”
Since its inception in 2020, the SWDL cooperative has grown from eight to 26 suppliers.
“We like the SWDL cooperative model and mindset and their principles on farming and approach to the industry,” Ben Anderson said.
“If the seasonal model maintains dairy farms for generations, we are very supportive.”
The timing of the reopening of Dennington coincided with a severe downturn in international dairy markets while farm gate prices rose by 30 per cent.
“Southern farm gate prices have become out of step with the global dairy market,” Ben said. “Australian exported dairy products are now expensive compared to our competitors in the US and New Zealand.”
He is also concerned about what is happening locally.
“Here at home we once believed we had a reasonably protected domestic market, but this has proven not to be the case.
“Supermarkets and consumers are increasingly choosing imported dairy products based on price, and they are satisfied with the quality.
“That doesn’t bode well for the long-term sustainability of the Australian industry.”
Looking forward to the 2024-25 season, ProviCo and SWDL are hoping to recruit new suppliers, however, the international competitiveness issue is weighing on the outlook.
“Together with ProviCo we prioritise the long-term sustainability and profitability of the dairy industry in south-west Victoria,” Brad said.