After a “very tough” decade, South Australian dairy farmers are celebrating the success of their milk brand, which has raised millions of dollars that will be used to safeguard the industry’s future.
Key points:
- More than $2.1 million in SADA Fresh sales proceeds has been invested into the industry
- SA Dairyfarmers plans to grow milk production as the outlook improves
- An analyst says the sector made significant progress in brand development during the last decade
The South Australian Dairyfarmers’ Association (SADA) launched the SADA Fresh brand 10 years ago in response to the $1-per-litre “milk wars” that raged in major supermarkets.
SADA president Robert Brokenshire said it had been a lengthy struggle, but the state’s dairy farmers were finally seeing the “light at the end of the tunnel”.
“Over the last 10 years we went through a very tough period — probably about seven of the last 10 have been really tough for dairy,” he said.
“We’re now starting to get a much more viable farm gate price.”
Mr Brokenshire said the sales proceeds were being used to support farmers.
“The uniqueness of this [brand] is that for every litre of milk that’s sold in the supermarket, 20 cents goes into an industry development fund,” he said.
“As a result, we’ve already had at least $2.1 million worth of projects and grants given to different dairy groups, and also to advocate to help grow the industry.”
The projects include school programs to promote agriculture careers, the development of a dairy traceability project and mental health initiatives for farmers.
‘Looking good’
SADA Fresh was originally stocked in 60 Coles supermarkets.
Mr Brokenshire said other opportunities were being explored, such as a cheese brand, but that would require the industry to expand.
“Our biggest challenge at the moment is producing enough milk for processors’ demands and [we’re] working hard with our farmers to help them grow their businesses so that we can produce more milk locally in our state,” he said.
The association is aiming for 20 per cent growth in SA in the coming years and Mr Brokenshire says there are positive signs “when you look at demand for dairy right across the world”.
“Whilst it’s in a little bit of a vacuum just at the moment because of inflation and economies struggling, certainly the long-term demand is looking good and we want to position SA so that we can continue to be a key player in what’s the $10-billion dairy industry in Australia,” Mr Brokenshire said.
Demand challenge
Rabobank senior dairy analyst Michael Harvey said the last decade were tough for the sector, but significant progress had been made in that time nonetheless.
“Over the last 10 years … there’s been a lot of activity around product innovation and branding in a category that’s very mature and clearly got very strong private-label penetration,” he said.
Mr Harvey said inflation-driven cost increases for milk and cheese had been good for the industry, which now faced the challenge of meeting demand.
“Obviously it creates challenges for consumers, but what it does do is provide better returns moving forward for an industry that had some challenges,” he said.
“We’ve lost a lot of milk supply over the last couple of years because of drought and market-cycle.
“It puts a crunch on manufacturing capacity and that’s what we’re seeing in terms of plant closures across the southern part of Australia.
“Where we are right now would certainly be good news for the supply chain, to see some stability in the milk pool and actually starting to see an increase again.”
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