Thursday, 23 June 2011 09:12

Fleurieu Milk Company flourishing

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Exasperation at years of low milk prices drove South Australian dairy farmers Barry Clarke and Geoff Hutchinson to take charge of their own destiny.

"When we considered the price we were receiving for our milk and the price being charged in the shops, we decided we'd be better off processing our own product and capturing some of that margin ourselves," Clarke says.

After taking a closer look at the possibilities, and with the benefit of a couple of lucky breaks along the way, Clarke, Hutchinson, and another Myponga local, Chris Royans, bankrolled their enterprise, Fleurieu Milk Company, in 2006.

Looking back after five years, they are both convinced that had they not acted they would not be dairying today. They just have to look around at how few farmers are still operating in what was once a flourishing dairy region.

"We're miles in front of where we thought we would be. With a gross income about double what it would be otherwise, dairy farming is a viable business for us now," Hutchinson says.

"And we've created around 40 permanent and part time jobs in our local community along the way."

Their first stroke of good fortune was the entry of Warnambool Cheese as a third processor seeking milk from South Australian farmers.

Until then, Clarke and Hutchinson had been selling their milk on contract to Dairy Farmers for processing into cheese and yoghurt in Adelaide.

"Warnambool were happy to take whatever volume of milk we could supply, which gave us an outlet and cash flow while we got Fleurieu Milk established," Clarke says.

Their second break came when a low cost entry to milk processing presented itself. They came across a containerised plant which had been built for the US Army to make ice cream on Guam.

The containers held everything they needed to process fresh milk at 1000 litres an hour.

"There was a lot of shiny stainless steel, pumps and gauges and we thought if it didn't work out we could on sell it," Hutchinson says.

They spent $30,000 changing the wiring from 110 to 240 volts and with little more than pouring some concrete they got the business up and running on a farm outside Myponga for less than $500,000.

"I don't know how we could have got started without this equipment. It would have cost us millions of dollars to build a conventional plant," Hutchinson says.

The two farmers became hands on milk processors, often working late at night pasteurizing and packaging milk transported from their farms in a 3000 litre vat mounted on the back of a trailer.

An early decision was made to bring a couple of friends on board to organise the distribution of Fleurieu Milk - named after the land peninsula that extends south of Adelaide.

"People liked the idea of buying a quality, local product and we have always been able to command a premium for our milk. It's just freshly pasteurized milk with nothing added," Clarke says.

The company now has a fleet of six brightly painted trucks on the road supplying about 50,000 litres of milk and cream a week to more than 600 independent outlets around South Australia and as far as Alice Springs.

Their dairy herds are complimentary with Barry milking about 215 Jerseys and Geoff 200 Friesians.

The Jersey milk is sold as a branded top-end, full cream product while the Friesian milk is used in their popular low fat range and now a selection of flavoured milks.

"My wife's family has been milking Jerseys since the 1920s and we kept the herd going when we moved back to Myponga from Mount Compass," Clarke says.

"Now that we have a viable future in dairying. We have just brought the neighbour's place and plan to take our herd up to about 300 cows."

About 12 months ago they took an opportunity to diversify into flavoured yoghurt production with sales climbing steadily to about 1 ½ tonnes a week.

A joint-venture, launched with the Queensland Yoghurt Company, gave the farmers access to quality recipes and manufacturing technology.

"They had been making inquiries about buying cream from us and were building markets for their yoghurt in Melbourne so it has been a good business fit," Clarke says.

Hutchinson says they have been fortunate that after an early growth spurt, sales have built steadily, allowing them to expand production without having to make further major capital investment.

While the original containerized processing plant is still at the heart of their business, they are now planning an upgrade, including a new shed and additional cold storage capacity.

When this is completed they will seek accreditation to allow them to explore the export market.

"We've had a number of inquiries from Asia and believe there could be potential to ship bulk milk in 1000 litre bladders for packaging overseas," Clarke says.

They will continue to develop their local sales potential, which includes a valuable marketing presence at farmers' markets in Adelaide and nearby Willunga.

"We have a good future as dairy farmers selling our milk to parochial South Australian consumers," Clarke says.

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Exasperation at years of low milk prices drove South Australian dairy farmers Barry Clarke and Geoff Hutchinson to take charge of their own destiny.

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