EXPANDING operations is not something many dairy farmers would be considering in the current climate.
Lower margins and milk price wars is making life tough for WA dairy farmers but Bannister Downs dairy is bucking the trend and last week announced plans to expand its business to produce more milk.
Bannister Downs, run by Mat and Sue Daubney, has established its own brand of milk and discovered a niche in not only the domestic market but also internationally.
With more than1500 Holstein Friesian cows on their property, the Daubneys reached their maximum milk production last year.
In order to meet new business opportunities and continue to grow, they decided to recruit their next door neighbours Brian and Julie Armstrong as their first external milk suppliers.
The move will see Bannister Downs increase its existing milk supply of 5.5 million litres per year by about 2.5m litres and will help to develop greater export opportunities.
"It's something we're really excited about," Ms Daubney said.
"The Armstrongs produce great quality milk and are fantastic at what they do, plus they farm right next door so the milk only has to travel a short distance.
"We are really pleased they have come on board, because we realise what a huge decision it was for them."
Ms Daubney said when they first started the business, the hope was to involve other farmers at some stage, so they developed a business around that in order to have more control over farmgate prices.
Their ethos had always been to operate as farmers first and processors second.
"The industry needed to think that way, in order to present the opportunity for farmers to run their business in a positive and sustainable way," she said.
"That way it also allows farmers to re-invest into improving their own facilities.
"Other dairy processors are involved in the dairy industry, but aren't as connected to farmers, and have a different focus due to accountability to shareholders.
"We are dairy farmers ourselves, so it's made a big difference to how we set up our business and pricing model."
While it seems like a huge step to go from just producing milk, to supplying, packaging and then selling your own brand, Ms Daubney said there came a point in 2004 when they were so unhappy they felt enough was enough.
The pressure by processors on farmgate prices caused many farms to dry up, forcing them into survival mode and some farmers moved out of the industry altogether.
"That is only short term thinking by the processors," she said.
"In 2004 we were at that stage, where we were looking at everything from deer farming to growing prawns instead of dairy farming.
"At the end of the day, dairy farming is what my husband was passionate about, so we decided to stick with it."
Ms Daubney believes the answer in solving the declining dairy industry in WA rests on the processors' shoulders and said the answer lay in not getting involved with retail or wholesale pricing campaigns.
"As soon as processors start selling milk to the major supermarkets for 75 cents a litre in order to gain more shelf space and win milk contracts, instead of the $1.50 litre which the wholesale milk is actually worth, they're shrinking their own margins while cutting the farmers' viability," she said.
With Bannister Downs milk in most good coffee shops around the State, Ms Daubney said the way they achieved their loyal following was through a total focus on milk quality.
Having just delivered their first pallet of milk to the Coles distribution centre in Kewdale last Friday, Ms Daubney is hopeful it would provide significant growth in the business.
The company already sells milk within WA, to Singapore and Hong Kong and has plans to move into China.
