Investment, awards boost WA dairy confidence

A deal between mining magnate Gina Rinehart and dairy innovators Mat and Sue Daubney, Bannister Downs Dairy, Northcliffe, was signed before Christmas 2014 but it did not become public knowledge until January.

Ms Rinehart and Ms Daubney had met at business awards in 2010 and maintained contact.

A chance comment by Ms Daubney triggered Ms Rinehart's interest, expressed through her Hancock Prospecting Pty Ltd subsidiary Hope Downs Dairy.

The deal, for an undisclosed amount, brought forward the Daubneys' dream of building a $22 million greenfields combined tourism, dairy and processing facility to lift Bannister Downs' production capacity from five million to 30m litres a year.

"It's positive for agriculture to see a local investor with a long-term vision making such a noble investment," Ms Daubney said.

But optimism was tempered later in January when Ben Purcell, managing director of Brownes Dairy, resigned to return to the United Kingdom with his family.

Mr Purcell had run Brownes since private equity company Archer Capital bought it from New Zealand's Fonterra in 2010.

He had led the way lifting farmgate prices for raw milk and under his stewardship Brownes had established commercial partnerships with Woolworths, A2 Corporation and Aldi, and started exporting to Hong Kong and Singapore.

There was concern too at the end of January when lightning strikes in Shannon National Park sparked the largest recent bushfire in WA which threatened to obliterate some of the eight dairy farms in the Northcliffe area.

It burned unchecked for 11 days, destroyed 90,000 hectares of forests, an estimated 1000 kilometres of fencing, hundreds of hectares of dry-land pasture, a machinery shed on Dennis Smeathers' dairy farm and other sheds and outbuildings across the region.

On Wally and Julie Bettink's dairy farm - the most vulnerable and most affected - there was relief when the smoke cleared and they discovered 16 missing heifers safe and 50 rolls of silage had also survived.

The Bettinks, daughter Hayley, 17, three young farm hands and local farmers with portable farm fire-fighting units on utilities defended the house and dairy as paddocks burned.

"The fire came through on the Sunday night and burned two thirds of the farm and then came roaring back from the other direction on the Monday and we lost the rest," Mr Bettink said afterwards.

"We couldn't leave because we knew we wouldn't be allowed back in again and the cows have to be milked every day no matter what, otherwise they dry up or get mastitis and that's our income gone for the rest of the year."

The herd was unfazed by the fires, smoke, sirens and frantic activity but, according to Ms Bettink, hated the helicopters.

If they flew over during milking there was a panicked mass exodus from the shed, often taking the teat cups with them, she said.

Northcliffe dairy farmers banded together to help each other out until fire zone roadblocks were lifted.

The community and Manjimup Shire came to their aid with stockfeed and fencing materials and Blaze Aid volunteers took over the oval for the rest of February and March as they helped repair the damage.

In March "business improvement and turnaround" specialist Tony Girgis was appointed Brownes' new managing director with no dairy industry experience.

He moved quickly to slash unprofitable product lines, including most cheese production, and redeveloped and relaunched the company's yoghurt range with TV advertisements featuring employees' children.

For Brownes' 61 suppliers he indicated no change to farmgate price for milk until contract renewals in 2017, although five had received a secret price increase under Mr Purcell.

Brownes is the biggest of the major milk and dairy processors in WA and processes about half of the State's milk, but Mr Girgis decided it did not need its biggest supplier.

Negotiations with Lactanz Dairies receiver Ferrier Hodgson over almost 18mL of milk a year produced by the four formerly New Zealand-owned dairy farms at Scott River, broke down.

Ferrier Hodgson ran a tender process for Lactanz milk, but later signed a short-term contract with Brownes.

A dairy industry development taskforce, involving processors Lion Dairy, Harvey Fresh and Brownes, along with Department of Agriculture and Food (DAFWA), Western Dairy and Dairy Australia, was announced at the WA Dairy Innovation Day in April.

Western Dairy chairman Vic Rodwell explained the taskforce's aim was to better align milk producer and processor objectives so the industry could take advantage of growth potential, particularly for extended-shelf-life milk, into South-East Asia.

Innovation day showcased the Hortin family dairy enterprise at Kronkup with a new feedpad and feeding system for 500 cows.

Malcolm and Kellee Hicks hosted an industry breakfast in their $1m robotic dairy at nearby Denmark.

In May, Brownes' focus on quality paid off with four gold medals and two champion awards for its Extra Creamy milk, coffee-flavoured milks and a flavoured yoghurt at the Dairy Industry Association of Australia annual awards for excellence.

WA companies and products dominated the awards.

Mundella Foods, Mundijong, also won four gold and two champion awards for natural and flavoured yoghurts.

Margaret River Dairy Company won gold medals for brie cheese and Greek yoghurt and Bannister Downs Dairy won a gold medal and two champion awards for a spearmint milkshake.

Dairy Australia's free DairyBase online information tool went live Australia-wide towards the end of May.

Farmers can use DairyBase as their own secure financial and farm records database or can choose to share information with industry-based researchers or Dairy Australia.

The strength of the WA dairy industry was demonstrated in June when eight herds listed in the top 5 per cent of Australian dairy herds.

Rated in third place by the Australian Dairy Herd Improvement Scheme, the Holstein herd of Boyanup brothers Ray and Mal Kitchen and their wives Donna and Lesley was best in WA.

The Jersey herd of PJ and J Boley, Karridale, rated sixth best of the breed nationally and Guernsey breeder Colin Gilbert, North Dandalup, was second out of eight nationally with his herd.

In June Bannister Downs submitted a planning application to Manjimup Shire Council for its unique combined dairy, creamery and tourist facility.

Designed to suit the contours of a hill top where it is to be located and proposed to be clad in striking burnished-copper coloured panels, the double-storey centre will be the new Bannister Downs administrative headquarters.

It will showcase milking, processing, packaging and dispatch operations to visitors from an enclosed second-storey viewing gallery and incorporate an exhibition space, café and public sampling area.

"This will change the dairy industry for WA," said Ms Daubney, Bannister Downs managing director.

The planning application was approved in September by the Southern Joint Development Assessment Panel.

A Western Dairy research hub was created at Bunbury in July under a $1.57m three-year agreement between Dairy Australia and DAFWA.

The hub took over existing DAFWA dairy research projects and accepted responsibility for future dairy research in WA.

Former DAFWA research scientist Ruairi McDonnell moved to the hub as one of three full-time employees.

Other researchers who had resigned or been made redundant by budget cuts and down-sizing at DAFWA were accepted as contractors.

Western Dairy's industry development specialist Rob La Grange and Young Dairy Network co-ordinator Jessica Andony also joined the hub.

Western Dairy executive officer Esther Jones said farmers would have a greater say in where research was directed.

At the end of July Northcliffe rebounded from the February bushfires to become WA's official Legendairy town.

It was one of eight Legendairy towns across Australia, with Stanhope in Victoria's Goulburn Valley later named as national Legendairy capital.

Brunswick Junction and Busselton were also nominated.

Sales of WAFarmers First full-cream and reduced-fat milk passed the 500,000 litres milestone.

Launched the previous November, processed by Harvey Fresh and sold through Coles supermarkets, the milk raised more than $100,000 for WAFarmers, with $25,000 of that to help dairy farmers.

Some farmers at WAFarmers' Dairy Council annual meeting at Busselton were critical of the association between the organisation and Coles which launched the $1-a-litre milk price war in 2011.

Dardanup farmer and Dairy Council president Phil Depiazzi admitted that four years on, Coles' and Woolworths' $1-a-litre milk price still soured WA dairy farmers' views of their industry.

Mr Depiazzi was re-elected as Dairy Council president with Brunswick dairy farmers Mike Partridge and Paul Ieraci as vice presidents.

In August six WA dairy enterprises were named in the top 100 in Australia for milk quality, based on annual average cell counts.

They were Terry, Kaye and Matt Brett; Luke and Vicki Fitzpatrick; R & E Moody trading as Glenwood Estate; Harold, Joan and Bevan Harrison; J & C Italiano and the Letchford family's Walsall Dairy, near Busselton.

In September there were more national award wins for Brownes and Mundella with the 2015 Australian Grand Dairy Awards.

Brownes claimed Australia's Champion Milk title with its Fresh Full Cream Milk and Mundella Greek Natural Yoghurt was crowned Australia's Champion Natural Yogurt for the seventh time.

Brownes also won Champion Yoghurt 2015 at the Perth Royal Show, the first time it had won a champion yoghurt award in WA.

In October Mr Daubney and Ruben Zandman were appointed as new directors of Western Dairy.

Northcliffe dairy farmer turned processor and manufacturer, Mr Daubney is co-principal of Bannister Downs Dairy.

A former dairy farmer, Mr Zandman is WA farm services manager for Lion Dairy and Drinks.

Plans for national deregulation of Bovine Johnes Disease (BJD) raised concerns of cattle industry bodies, including dairy farmers, and WAFarmers in November.

WA is the only State recognised as free of BJD, a chronic contagious enteritis, and deregulation could add significant assurance testing costs for local breeders and live exporters.

Veterinarian and dairy farmer Warrick Tyrrell represented dairy on an advisory group which appointed a subcommittee to work on WA-only protocols to minimise risk of BJD being brought in with cattle from the eastern States.

It would also work on establishing BJD testing regimes, surveillance and management procedures for WA.

However, advisory group chairman David Jarvie said it would not be possible for WA to retain its BJD-free status under a proposed deregulated National Johne's Disease Control Program.

The year ended on a more optimistic note with Western Dairy announcing a competition for 12 young dairy farmers and dairy farm employees to present their views on barriers to growth in the WA dairy industry and their solutions.

Winning farmer and employee will each receive a $2500 prize sponsored by Brownes.

Perth-based carbon abatement company Carbon Conscious also announced its plan to move into dairying, teaming with Perth-based Green Lake to produce and air-freight fresh milk into China under the Capel Farm brand name.

Green Lake has a distribution network in Henan Province where Australian milk sells for between $8 and $10 a litre and plans up to a further 300 Capel Farm-branded concept stores selling Australian sourced products and produce.