Dairy processor Beston looks to the east for milk

A SOUTH Australian dairy processor has hinted it could source milk from Victoria as it looks to grow its pool by 40 per cent by the middle of next year.

A SOUTH Australian dairy processor has hinted it could source milk from Victoria as it looks to grow its pool by 40 per cent by the middle of next year.

Australian Securities Exchange-listed Beston Global Food Company chief executive Sean Ebert said they were signing SA farmers with plans for them to move their milk supply across in the second half of this season.

Last week, BFC flagged at its annual general meeting in Adelaide that it wanted more milk by the mid-next year- pushing its annual volume up to at least 130 million litres. It will grow its milk pool by taking on new suppliers as well as co-investing with farmers.

Mr Ebert told The Weekly Times BFC had about 30 suppliers, representing a split of 80 per cent external milk and 20 per cent from its own farms.

Traditionally, BFC has collected milk from SA, but Mr Ebert flagged the possibility of crossing the border when asked whether there was enough milk out of contract to recruit in SA if BFC wanted 300 million litres in the future.

“There is if you go over the border into Victoria as well,” he said. “The transport cost to bring milk back from over there is not all that different than if you bring milk back from the South East.”

BFC has established a dairy farm real estate trust to secure additional milk by investing in dairy farms, which the existing operator would continue to run. This farm would then supply BFC.

Mr Ebert would not disclose the farmgate milk price for BFC, saying it is “sustainable”.

BFC expects to have a new state-of-the-art mozzarella plant operational at its Jervois factory early in the new year.

Meat, seafood, health and nutrition are also part of the BFC’s business, but the dairy section represents 85 per cent of sales, according to the company presentation on the ASX.

Mr Ebert told the meeting the revenue from BFC’s Dairy Division in the first half of this financial year was on track to exceed the entire last financial year.

“We have strengthened the competitive platform of our dairy business through stronger brand positioning ... and improved distribution channels both domestically and through Asia,” he said. “The investments made in the previous financial year to expand production capacity, sales and distribution capacity is expected to translate into higher earnings this financial year.”

BFC reported a sales revenue increase of 49 per cent to $23.8 million and a loss after tax of $7.7 million.

Mr Ebert said it was a “great time” to be in the industry”.

“There’s a huge amount of interest in dairy, it’s actually a hot area,” he said. “There are huge valuations on dairy businesses at the moment.”