Bega Group requests more milk from FNQ farmers

One of Australia's largest dairy processors is looking to Far North Queensland farmers to boost local milk production and reduce reliance on interstate supplies.

Bega Group wants Atherton Tablelands farmers to increase deliveries to its Malanda factory by 20 to 30 per cent.

"We get about 30 million litres a year from the farmers on the tablelands, and we'd love to take that to sort of 35 or 40 [million]," the company's chief executive, Pete Findlay, said.

He said seasonal disruptions could force the company to bring in 1 million to 2 million litres of milk a year from Victoria to keep the factory operating.

Sourcing more milk locally would reduce reliance on increasingly expensive transport from the southern state, thousands of kilometres away.

Mr Findlay said over the past four years, the company had substantially increased the price it paid to farmers and had introduced incentives to encourage milk production.

"We think it's a really viable industry for farmers to be involved in and we're hoping that the farming community can respond," he said.

Eric Danzi, chief executive of dairy advocacy group eastAUsmilk, welcomed the request from the company.

"I think it's very positive. It'd be great to see more milk produced locally and sent through the factory,"

Mr Danzi said.

But he said for increased dairy production in the north to be sustainable, pricing should also be adjusted.

"If you want to actually grow by 20 per cent, you probably need to increase the price by at least 10 cents a litre to encourage that to occur," he said.

"I think the starting point needs to be reintroducing the 5-cents-a-litre diesel levy, which was withdrawn a month or so ago."

Meanwhile, dairy farmers in southern Queensland are struggling to secure milk supply contracts.

With Victoria closer to major processors in southern Queensland, milk can be transported more cheaply from interstate, leaving local producers competing for processing capacity.

"Down in south-east Queensland, we saw farmers not able to find a home for their milk this year," Mr Danzi said.

"The reason why it's different is because it's so much further to transport milk to north Queensland than to south-east Queensland from areas like Victoria, so the cost is just that much higher."

Earlier this year, eastAUSmilk announced its dairy plan to enhance the Queensland industry.

Mr Danzi said a request like this from Bega did, in part, align with its goals.

Bega also announced it was building a new cold chain storage in Cairns, which would hold about 50 per cent more milk than its current site at Malanda.

Mr Findlay said the company had at times had to ship milk from Far North Queensland to Brisbane because it ran out of space at Malanda and he hoped this would help address that.

The storage site was expected to be built next year.

More northern farmers required

Atherton Tablelands dairy farmer James Geraghty said it was great to hear the processor wanted more milk but believed more farmers would be required to meet that target.

But he said as the industry encouraged a new generation, this would give young farmers confidence.

"We also have four farms, four people looking to come in and start farms up or expand farms," he said.

"That's a really, really positive part of our industry, and we have a lot of young people within the industry looking to grow the industry."

One of those new, younger farmers is Tom O'Connor.

He recently returned to the dairy farm his parents sold about 12 years ago on a lease purchase agreement and said he felt excited about the future of the industry.

"I think it's great that [Bega] are putting their best foot forward and really getting out there and asking for the milk and trying to give clear price signals that that's what they want," he said.

Mr O'Connor has been working with the Dairy Pathways group in Malanda to help bring more young farmers onto the scene.

"There's a group of us who are hoping to put together some local investment in local properties and get young people onto the land dairying, and supply the milk that Bega so desperately wants and needs," he said.