And the movement of 180 million litres in the past week hadn’t finished, with new milk broker National Dairy Products, expected to finalise milk volumes in the coming days.
In days of turmoil after the collapse of United Dairy Power on April 24, Warrnambool Cheese and Butter skimmed the lion’s share of the 40 million litres of milk on offer in South Australia.
Warrnambool picked up 90% of the South Australian UDP suppliers and 70% of the Western Victorian UDP suppliers.
WCB was expected to gain more than 60 million litres by the time the movement settled.
It was understood Parmalat picked up about six million litres close to Adelaide.
Global dairy giant Fonterra didn’t pick up any milk while Australia’s largest processor, Murray Goulburn, wouldn’t comment on whether it had gained milk from UDP.
Burra Foods was gifted UDP’s Gippsland supply after it bought its Poowong factory. It had picked up about 50 million litres of milk but it was understood many large Gippsland suppliers had gone to National Dairy Products, as well as some southwest Victorian suppliers and up to 15 million litres from northern Victoria.
The whirlwind of trading began on Tuesday night when Murray Goulburn told its suppliers it had bought the food service mozzarella brand Caboolture and some cheese-making equipment from UDP.
Burra Foods followed by telling farmers it had bought the Poowong UDP factory.
UDP suppliers were sent packing with three days to find a home for their milk as their processor went into receivership.
Just as the doors were closing on UDP, the new company, National Dairy Products, headed by UDP founder Tony Esposito, rose from its ashes.
He claimed to have secured more than half of UDP’s milk and had started broking it to some of his former customers.
Saputo senior vice president Richard Wallace said 40 suppliers were added to WCB’s Allansford factory last week.
WCB wanted to grow and could handle extra milk, even during the spring peak. WCB processed 850-900 million litres of milk a year before the extra milk was added.
South Australian Dairyfarmers Association president David Basham said it would be expensive to cart the extra milk, which would occur during the spring peak, back to southwest Victoria.
Previously it had gone into Parmalat in Adelaide but since Parmalat had picked up extra suppliers the excess might not be needed.
Basham said it was something the industry would need to address long-term.
“I don’t think at this point losing UDP is going to change things much at all,” Basham said.
“We are still very much in the Victorian milk pool where prices are set and yes, UDP paid above that but they also did in Victoria and it didn’t shift the overall price.”
He said South Australian UDP suppliers were relieved after finding a processor.
Esposito said he hoped to secure more than 100 million litres of milk, mostly from farmers who had supplied UDP.
NDP would broker milk to the businesses that previously supplied UDP, except Lion which had a contract with Burra Foods, Esposito said.
He founded UDP and sold it to Hong Kong-based private investor William Hui in February last year. By November its parent company, Five Star United Food, was put in receivership by Rabobank.
