Australian Consolidated Milk move into cheese production at Girgarre plant

The move into cheese by Australian Consolidated Milk is set to increase its Girgarre workforce by 15 per cent once the new line is fully operational.

Construction of Australian Consolidated Milk’s cheese production facility at Girgarre.

CHEDDAR and mozzarella curd is set to be produced by Australian Consolidated Milk at its Girgarre factory within months.

ACM management say the addition of cheese production will optimize milk solids yield at the factory and diversify the processor’s product range.

The move increase the Girgarre site’s workforce by 15 per cent to 60 employees when the cheese portion of the factory is fully operational in August.

At its peak, the plant will be able to produce a total of 20,000 tonnes of cheese a year.

ACM managing director Michael Auld said product diverisification helped cushion suppliers from pricing volatility.

“Cheese production gives us another option and it’s a market that is traditionally less volatile than other dairy ingredients,” Mr Auld said.

“The cheddar cheese market appears to enjoy similar customer purchasing habits as those buying liquid milk from ACM. This is expected to help keep the cheese price relatively stable for us compared to the volatile export dairy commodity markets.”

On June 1, ACM announced an opening farmgate price range of $6.30 to $6.90 per kilo milk solids.

ACM management also confirmed on the June reporting day that the processor would offer an opening farmgate price average for organic milk at $8.60 per kilo milk solids and a figure for a2 milk of 56 cents per litre.

“If we had a narrow market or product focus, ACM pricing would ride the highs to the top of the market cycle and the lows right down to the bottom and this would be reflected in volatile farmgate pricing,” Mr Auld said.

“We don’t think this is the best model for long term sustainable profitability.”

“Cheese helps us maximise the value of our solids by balancing our protein across the streams. For example, powder requires less protein and cheese requires more protein. So, by having both we are in balance for protein and therefore there’s no need to bring other products onto the site such as lactose.”

Suppliers have welcomed the move, including Gippsland farmers Soren and Nicole Christensen, who milk about 400 cows near Traralgon.

“ACM are consistent, they don’t say one thing and then do something completely different,” Mr Christensen said.

“We need consistency for our business, security of an opening price which is stuck to and increased if they can.”