Bega Group seeks more Far North Queensland milk supply to cut Victoria imports

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Bega targets local milk supply

Highlights

Bega Group is seeking to boost Atherton Tablelands milk deliveries to the Malanda factory from 30 million up to 40 million litres annually to reduce reliance on Victoria imports.
Bega has raised farmgate milk prices and announced new incentives, while also building a Cairns cold chain storage facility with 50% greater capacity, expected to open next year.
Industry advocates say a rise of at least 10 cents per litre is needed to expand regional milk output by 20% and support Bega's growth target amid ongoing supply challenges.

Supply push and factory expansion plans

As reported by ABC News, Bega Group is asking farmers in the Atherton Tablelands to increase milk deliveries to its Malanda factory from about 30 million litres a year to roughly 35 million to 40 million litres. Chief executive Pete Findlay says seasonal disruptions can force the processor to bring in 1 million to 2 million litres of milk annually from Victoria to keep the plant operating.

Findlay says sourcing more milk locally would reduce reliance on transport from the southern state, where freight costs are becoming more expensive. He also says Bega has substantially increased the price it pays farmers over the past four years and has added incentives intended to support higher production.

Bega is also building new cold chain storage in Cairns, with capacity to hold about 50 per cent more milk than its current site at Malanda. Findlay says the company has at times had to send Far North Queensland milk to Brisbane because it ran out of storage space at Malanda, and the new site is expected to be built next year.

Regional industry response and growth challenges

Eric Danzi, chief executive of dairy advocacy group eastAUsmilk, says the request is a positive signal for the region because it supports more local production and greater use of the Malanda factory. But he says sustained growth in northern dairy output would also require stronger pricing, adding that a rise of at least 10 cents a litre may be needed to encourage production growth of 20 per cent.

The push for higher output comes while dairy farmers in southern Queensland are struggling to secure milk supply contracts. Bega took over the Malanda factory in 2021, and Danzi says the company's latest request partly aligns with eastAUsmilk's dairy plan announced earlier this year to strengthen Queensland's dairy industry.

Atherton Tablelands farmer James Geraghty says the target is encouraging for the sector, although he believes more farmers will be needed to achieve it. Younger producer Tom O'Connor, who has returned to his family's former dairy farm under a lease-purchase agreement, says clearer price signals from Bega help build confidence, while local industry groups are working to bring more young farmers into dairying and expand regional supply.

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