I’ll start by inviting Senator Rice to spend some more time in Tasmania, where we don’t have a single toll road. It’s a great part of the country. We’re very proud of it. I rise today to continue my theme on senators’ statements to highlight the positive things coming out of Tasmania. It’s always a pleasure to see Senator Urquhart in the chamber who has the joy of sharing the positivity about Tasmania.
Today, I’m talking about the dairy industry in Tasmania. It is one of the biggest agricultural sectors in our state which has an annual worth of over a billion dollars—which is a significant chunk of what Tasmania is about in terms of economic outputs. We’ve seen a growth of over 42 per cent in milk production in Tasmania over the last decade. To give you a bit of an idea of the size of the industry in Tasmania, there are approximately 430 dairy farmers in our small state, running an average of 336 cows per farm, which is higher than the national average of 272 cows per farm. The industry also employs around 1,400 people across the regional parts of our state.
Over recent years, there’s been an increase in the number of small-scale dairy operations and cheese-making operations across the state as more operators move to take advantage of Tasmania’s unique brand, which is world-renowned. At this point, I would like to take the opportunity to spruik, again, the flavours of Tasmania being held in the Great Hall tonight. I hope all senators from right across the country will join with me in sampling the fine delights from our great state, including our dairy products. I look forward to seeing you there, Senator Burston. WA senators are welcome to attend, of course.
In addition to the small-scale dairy operations that are growing around our state, we also have a number of major dairy operations investing heavily in our state. They include Fonterra and Mondelez, who are the owners of the Cadbury brand. Many in this chamber would recognise other well-known brands which include: Ashgrove Cheese, Pyengana cheese, Westhaven Dairy, Bruny Island Cheese Company, The Wicked Cheese Company, Grandvewe Cheeses and Betta Milk Co-operative Society. As I said, it’s a great opportunity, when travelling across Tasmania, to visit some of these operations and to see how they masterfully turn such a simple product into a premium item that many people from across the world want to purchase and take home with them. Over the next decade, milk production in Tasmania has the potential to grow from 883 million litres per year to around 1½ billion litres per annum. Of course, that’s all dependent on the continued investment in additional processing capacity to ensure that we get as much milk processed as possible. That means almost a doubling in a decade of what we produce now. That’s a huge growth in this market.
On this subject, it’s a pleasure to talk about the Into Dairy project which was established in 2013. It is an industry program aimed at accelerating the growth of Tasmania’s annual milk production to meet the significant shortfall of 350 million litres between processing capacity and current farm output. In the last two years, milk-processing capacity in Tasmania has accelerated rapidly, as evidenced by Fonterra’s $6.5 million gas conversion at the Spreyton plant in 2011 and the $12 million upgrade of its Wynyard cheese plant in 2010. Fonterra previously processed 65 per cent of the state’s milk, with capacity for over 500 megalitres.
Tasmanian Dairy Products has invested $75 million in a new milk powder operation in Smithton, generating much-needed employment. It opened in September 2012 with a capacity of over 250 megalitres. Lion invested $150 million into a new plant in Burnie during 2013 and 2014, which centralises their national cheese making. It will mean 50 megalitres to 100 megalitres of additional milk-processing capacity. It is also great to point out that they have investments planned on King Island which, I think we all would agree, is much needed for that community. Cadbury has also invested significantly in recent years in their chocolate-making process in Burnie and in Claremont with a further $4 million invested in May this year for new equipment.
I’d be lying to say that it is all good news. Of course, occasionally, we do see some of the pressures faced by milk processors and our dairy farmers. This is a sign of the struggles the industry has faced and the increasing international competition that our milk industry, our dairy industry, is facing. We can’t ignore that. It’s important to point those things out as the reason it was important that the Into Dairy project was supported the way that it was.
On the north-west coast, it is my pleasure to join my state colleague Liberal member for Braddon, Joan Rylah, on the Circular Head Regional Economic Working Group which was established shortly after Murray Goulburn made their announcement that they would be closing their operation at Edith Creek. I look forward to working with the members of that working group and those people who previously supplied that processing facility on solutions for the dairy industry in that region. It is pleasing to note, though, that the Edith Creek plant is definitely on the market with Murray Goulburn seeking to sell that asset, which means local operators or other interstate or even international operators may wish to come in and get a stake in the premium industry that is the Tasmanian dairy industry.
The Into Dairy program was an integrated approach to help build investment, create jobs growth and increase cow herds in Tasmania. The aforementioned challenges—the shrinkage of the industry, the international competition and the problems of milk prices that we have had much reporting on over the last couple of years—are part of the reason this program was so important. I recently had the pleasure of officially marking the achievements of the Into Dairy program—which was all about sustainable dairy development and of course a very important investment in Tasmania’s future—on the farm of Jason and Karen Chilcott in the beautiful Meander Valley behind Deloraine. I was doing so on behalf of a very effective representative of regional Australia: Senator Fiona Nash. At the marking of the achievements of this program, we did a quick tour of Jason and Karen’s dairy farm, and it was great to see the developments that they have invested in, including a robotic milking and pasture management system, which is a sign of where this industry is heading. Most people who consume milk, most people who live in cities, don’t really have a great appreciation of the effort and now the precision that dairy farmers engage in when undertaking these operations.
This innovative project, supported by Into Dairy, will help ensure that the Tasmanian dairy industry can meet the current dairy processing requirements and capacity and sustain future milk growth requirements, with the plans on foot to convert an additional 18 conventional farms into dairy production farms. Into Dairy has also engaged with agribusiness and banks to encourage investment in automated or robot milking systems, again increasing the capacity of milk output across Tasmania.
Importantly—and this was the best part for me—this project is aimed at encouraging young Tasmanians to seek a career in the Tasmanian dairy industry. It is about keeping them in our regional communities and finding employment in our regional communities. That’s an incredibly important part of this project.
The project was jointly funded by the Australian government, with just shy of $375,000; the Tasmanian government, $740,000; DairyTas, $90,000; and contributions from a number of industry partners to the tune of $366,000. Everyone had buy-in, and it had great industry and community support.
It’s great to travel around Tasmania, as I previously said, to see the dairy farmers and farmers generally just getting on with what they do best, and that is working hard to provide the economic activity that they do and indeed to keep us fed and watered. As a Tasmanian representative—and I’m sure I speak on behalf of others from my great state—I can say that we absolutely value the contribution of our dairy industry and the contribution that they make to our economy and our regional communities.
Dairy farmers in Tasmania have a lot to be positive about. The future looks good for the industry and those participating in it. And—as my message to Tasmanians looking for a job for the future—there’s never been a better time to think about getting involved in the Tasmanian dairy sector.