Van Dairy Limited (VDL), Tasmania’s largest dairy operation, will slaughter at least 700 cows after losing a 25-million-litre milk contract with Fonterra. Fonterra Australia stopped collecting milk from VDL farms earlier this month, citing unresolved commercial issues. VDL’s milk supply has declined significantly in recent years.
Matt Watt, Fonterra’s director of farm source, confirmed milk collections at VDL had already ceased: “We stopped collecting milk from all VDL farms on 1 February after providing VDL with several months’ notice to mitigate the impact on their business and supporting them in determining their next steps. The milk volumes supplied by VDL have declined significantly in recent years.”
Fonterra intends to replace the drop in supply from other Tasmanian farms and has no plans to reduce production at its Spreyton and Wynyard processing plants. VDL’s owner, Xianfeng Lu, described the situation as “disappointing” and stated that Van Dairy should manage its herd numbers now and going forward. The company will send at least 700 cows to the Greenham abattoir in Smithton, accounting for approximately 10% of its herd. He did not confirm whether it was a larger-than-usual cull of the dairy herd, which is currently in calving season and preparing for winter milk production. He will continue to support the Van Dairy farms and their 90 employees, as well as fight for his farm workers, the dairy industry, and job opportunities in the Circular Head region.
In 2022/23, Tasmania had approximately 351 dairy farms producing 906 million litres of milk, accounting for 11% of Australia’s total milk production. With an average dairy herd size of 477, Tasmania has approximately 170,000 cows.
