Largest Aussie Dairy Co-op Taps Into Growing Demand for Organic Milk

AUSTRALIA - Dairy processor Norco is chasing farmers as far south as Victoria to supply it with organic milk as part of its expansion into the sector.
calendar icon 1 June 2018
clock icon 5 minute read

ABC Online reports that Norco chairman and dairy farmer Greg McNamara said the price paid per litre of organic milk was significantly higher than regular milk.

In fact it can be a difference of around 30 cents a litre from what the organic farmer receives and what the conventional farmer is paid.

"Our organic farmers would be receiving around somewhere between 85 to 87 cents a litre on a yearly basis, whereas the conventional farmer is receiving somewhere around 57 to 58 cents a litre," he said.

"So there's a big difference, there's a great reward when you get there, but you've got to get there first.

"We've got two farmers at the moment and we've got a number thinking about transitioning across.

"We advertised recently within our membership and within Victoria to actually look for organic supply and I think we had about 17 farmers that expressed an interest."

More labour intensive

The 123-year-old co-operative, based in Lismore in northern New South Wales, has factories further south at Raleigh and Labrador on the Gold Coast.

Mr McNamara is one of 326 active members on 214 farms in NSW and south-east Queensland supplying the co-operative with 222 million litres of milk per year.

"We've just finished off a strategic plan on organic milk and it's certainly showing that investing in the organic industry going forward from a milk perspective could give us a great reward," he said.

"We actually see organics being somewhere between 10 to 15 per cent of our annual production, which means in five years time we could have up to 20 to 30 million litres of organic milk within our Norco system."

While the price difference between organic and regular milk is substantial and a definite reward for conversion the cost of doing so is not cheap.

"One of the bigger challenges, especially the organic dairy farmer when they transition to organics, is that they have that transition period of around three years.

"They move from a conventional style of farming to the organic, and that transition period certainly has a higher risk of failure because you're getting the same milk price as conventional but not achieving a higher milk price that you would under the organics," he said.

Mr McNamara is also the president of Organic Industries of Australia, the new peak body for the country's organics industry.

"Organic farmers are generally quite small in the sense that they're generally a little bit more labour intensive so they don't have the large scale and they need to be more focussed," he said.

"Organics is not just about producing an organic product it's certainly very much considering the environment and the way you actually produce your product, which fits perfectly with the Norco scenario."

Conventional dairy farmers switch to Norco and convert to organics

One recently organic certified dairy now supplying Norco is Benmar Farm on the NSW mid-north coast which runs cattle bred for its meat and milk which is "like silk" in taste, this should be reflected in increased returns for their purse.

Karyn Cassar and her partner Carissa Wolfe this week began to supply their organic certified Fleckvieh milk into Norco's Raleigh factory.

While their numbers are low in Australia, Ms Wolfe said the German breed is second only to Holsteins in numbers worldwide.

"We had the realisation that wow, now the girls are being recognised for the effort they put in to, not us, the cows," Ms Wolfe noted while overlooking some of their herd which numbers between 220 and 230.

Presently milking around 110 on about 66 hectares, they qualified for the organic certification in two years instead of the usual three.

This was due to them having kept meticulous records over the four years they have operated at Hannam Vale, north of Taree.

"We are trying to build a whole farm picture, where we can produce enough milk as a commercial dairy to feed people," she said.

"While at the same time have it be resilient environmentally and return to the land, return to the animal, back to the humans to what we are taking from them, so it is a reciprocal relationship."

In making the change, they no longer bring in grain due to the cost.

"It was so incredibly significant that we have basically gone no grain to stay in business for the conversion," Ms Wolfe said.

While their move has been gradual and therefore the changes financially were not as dramatic, Ms Wolfe believes processors and possibly government should assist producers who make the three-year transition.

"I think there is value in governments which have environmental concerns for people who want to convert to organic. If that is an objective of government that would suit for them to support that process," she said.

"If processors want the certified product at the other end of the journey they need to be part of the journey with the people producing it."

It is that "journey" which Ms Wolfe argues help set the Fleckvieh apart from other dairy cows.

"If the Jersey milk is like velvet in your mouth, the milk from Holsteins can be a bit watery. Sorry Girls! The Fleckvieh is a lot more like silk."

Organics expert calls for government subsidies

The director of the Centre for Organics Research at Southern Cross University in Lismore, Professor Carlo Leifert, has called on the Federal Government to provide subsidies to organic farmers.

He believes that if farmers in Australia were offered subsidies to convert, a process that can take up to three years here, that more would take the step.

"It's not just a lack of R&D support and training, organic farmers here have to work in a much more volatile market environment," he said.

Professor Leifert was previously employed as professor in Ecological Agriculture at the University of Newcastle in the United Kingdom, has worked extensively with UK supermarket giant Tesco, and owns an organic farm on Crete in the Mediterranean.

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