One of Australia’s largest dairy operations to cull 700 cows in wake of cancelled milk contract

One of Australia’s largest dairy operations to cull 700 cows in wake of cancelled milk contract

At least 700 cows will be sent to slaughter by Tasmania’s largest dairy operation in the wake of losing a 25-million-litre milk contract with dairy giant Fonterra.

Fonterra Australia confirmed it had stopped collecting milk from Van Dairy Limited (VDL) farms early this month.

The processor’s director of farm source, Matt Watt, said a number of unresolvable commercial factors had prompted the decision.

“We stopped collecting milk from all VDL farms on February 1 after providing VDL with several months’ notice to mitigate the impact on their business and supporting them in determining their next steps,” he said.

“The milk volumes supplied by VDL have declined significantly in recent years.”

Mr Watt said Fonterra would seek to replace that drop in supply from other Tasmanian farms, and that it had no intention to reduce production at its Spreyton and Wynyard processing plants.

Van Dairy kept its Woolnorth farm after a sell-off of cows and prime dairy country.(ABC Rural: Hugh Hogan)

Herd to shrink

VDL owner Xianfeng Lu said the situation was a “disappointing” development.

“Given Fonterra is seeking to reduce their milk production and walk away for their exclusive milk supply agreement, it is appropriate Van Dairy manages its herd numbers now and into the future,” Mr Lu said.

It is understood the company will send at least 700 cows to the Greenham abattoir in Smithton, representing about 10 per cent of its herd.

Mr Lu did not confirm if it was a larger-than-usual cull of the dairy herd, which is currently in calving season, heading into winter milk production.

He said he would continue to support the Van Dairy farms and its 90 employees.

“I will continue to fight for the workers on my farms, the dairy industry and employment in the Circular Head region.”

Xianfeng Lu bought the then Van Diemen’s Land Company in 2016.(ABC Rural: Hugh Hogan)

Tumultuous years

It follows a series of turbulent events for Van Dairy, including an investigation over its failure to properly deal with its overflowing effluent systems and a mass resignation of its board in 2018.

It also follows a $62.5 million deal in 2021 that saw the transfer of 5,000 cows and 2,200 hectares of prime dairy country from Van Dairy to Melbourne-based asset manager Prime Value.

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