Recently I presented to the Western Dairy business breakfast in Busselton.
This is an annual event, and I was asked to present on behalf of the Western Australian section of the Dairy Industry Association of Australia. (DIAA) www.diaa.asn.au
I have been a member of this association and starting in the dairy industry in 1976.
The population of Western Australia will soon reach 3 million people.
Each of these people consume dairy products that take about 380 L of milk per person.
This means that each year over 1,000,000,000 L of dairy products will be consumed in Western Australia alone, 2/3 of this product will come from about 3000 km away by rail road for ship.
Much more of this could be made locally
At the moment Western Australia is self sufficient in drinking milk and some of the yoghurt. But all the cheese, butter, ice cream and powders travel at least 3,000 km from their manufacturers to the Perth distribution centres. They travel by Road, Rail or Sea
At the moment about
- 100 tonnes of cheese per day
- 35 tonnes of butter per day
- 120 tonnes of Ice cream per day
Travel to WA.
The combined retail value of these products is about $5 million per day!! This is spread over more than 3 major distribution chains. Any significant disruption will result in significant retail sales losses
This is a risk to WA and the retailers who operate in this space.
If the supply lines are cut, significant retail losses will occur.
One risk mitigation strategy
WA has the agricultural resources to produce a lot more milk.
An added benefit of increasing the size of the dairy industry in Western Australia is increased jobs as well as increased self-sufficiency.
It is recognised that not all the imported product will be replaced by local production, but a significant amount will or can be, and this will support the world scale (cost effective) factory.
There are people in Western Australia at the farm level interested in growing, the skills exist to build a new large-scale (world scale, cost effective) factory. The energy resources and water required are also available
The domestic and export markets exist, however the major distributors must be enrolled in the concept or believe that this is good for their business before this can go forward.
I hope that this discussion can be started seriously.