Dairy Food Safety Victoria 2022-23 annual report: Processor numbers

New data shows some surprising insights into the number of Victorian dairy manufacturers last year. See the details.

Milk manufacturers have bucked Victoria’s drift of dairy decline, with fresh figures revealing cheese and butter factories are still churning despite the downturn.

New data from Dairy Food Safety Victoria confirmed there were 200 dairy manufacturers statewide at the end of last financial year, up slightly from 195 manufacturers in the 2021-22 reporting period.

Over the past decade, dairy manufacturer numbers across Victoria have remained relatively stable, according to DFSV data, with the 2019-20 period a high point.

That financial year, 226 manufacturing licences were held statewide – the same 12-month period when the coronavirus pandemic first swept through Australia.

Dairy Farmers of Victoria president Mark Billing said while the number of dairy manufacturers remained stable, there were underlying issues related to the national milk pool.

Australia’s total milk output is around 8 million litres, the lowest annual production figure in three decades.

“There are a lot of factories out there with a lot of capacity,” Mr Billing said.

“Australia’s milk pool at around 8 million litres last financial year was the lowest point in decades and the trend is likely to continue.

“High interest rates are a disincentive for new farmers to get into dairy, and there’s likely to be an interest rate rise next week, so it’s a problem that will be with us for a while.”

Victoria is home to 200 dairy manufacturers. Picture: Nikki Short

Victoria’s dairy farm numbers had been in steady decline since the early 2000s deregulation of the sector, but the 2016 clawback by Fonterra and Murray Goulburn accelerated the downward trajectory.

There were 2774 bovine dairy licences statewide at the end of last financial year, down more than 200 from the 2984 recorded at the end of the 2021-22 reporting period.

This week, NSW-based processor Norco posted a $9.1 million profit for 2022-23, a $200,000 jump on the prior financial year.

Norco chief executive Michael Hampson said consumer response to the co-operative’s brand had never been stronger.

“Our brand continues to grow and perform strongly, which culminated with Norco taking the number one brand position in Queensland in April this year,” he said.

“We continue to unashamedly communicate with consumers that Norco is the only 100 per cent farmer-owned brand on that market.

“That brand performance is proof that the proposition resonates strongly with consumers, who genuinely want to support our dairy farmers by buying our products.”