Processor rescues stranded Oz farmers

The 40 suppliers, who produce 60 million litres of milk, were left with nowhere to send their milk, after processor United Dairy Power (UDP) went into receivership last month.

WCB’s senior vice president and general manager Richard Wallace says UDP’s financial woes affected 52 suppliers in Southwest Victoria and South Australia and over 100 million litres of milk were displaced.

Most of these suppliers were given minimal notice (about 48 hours) to make alternative arrangements for their milk.

“We have worked hard to attract these suppliers to WCB and are pleased to announce that over 40 have joined the company,” he says. “This is estimated to provide us with an additional 60 million litres of milk annually.”

All former UDP farmers who have joined WCB will be paid on the Saputo-owned company’s milk pricing system.  

“As these suppliers are joining us under such unexpected and unforeseen circumstances and also so late in the current season, WCB has assured them they will not be adversely impacted financially in comparison to UDP monthly prices by joining us,” says Wallace.

“We expect our milk price will be on par or above that of UDP for most suppliers joining us in the remaining months of this season, particularly as we aim for a further increase in milk price.

“While the new suppliers and increased milk volume will have very little impact on the business performance for the current season, it will deliver incremental value and efficiency gains to WCB.”

Last year Hong Kong businessman William Hui paid about A$70 million to take control of UDP, Australia’s largest privately owned milk processing company, from its founder Tony Esposito.

But UDP’s parent company was placed in receivership after its banker sacked its board and appointed a new chief executive to manage its debts.

 Earlier this year Australia’s largest dairy cooperative, Murray Goulburn, bought the Caboolture cheese brand and processing equipment from UDP.