“I can see some wonderful opportunities with products being exported to the emerging superpower, but what effect will China buying into the Australian market have on the industry as a whole?” he said.

It is understood around 50 dairy farmers between Colac and Mount Gambier have signed individual option deals to sell their farms, worth a collective $400 million, to a Chinese dairy conglomerate.

The farms run 90,000 cows producing 500 million litres of milk a year, about one-twelfth of Victoria’s total milk supply.

Reports state the plan is for the newly aggregated farms to boost their milk production by at least 50 per cent, to supply two new consortiums-owned processing plants to be built in western Victoria that would process and export $700m worth of prized infant milk formula into China and other global markets.

“Exporting dairy products to China is a wonderful opportunity and there is huge demand, but what worries me is we’ve got the Chinese coming here and buying properties and building their own processing plants, which would be in direct competition to the largest export dairy processors, Murray Goulburn,” he said.

“If they start producing and processing their own products, it could have a detrimental effect on the industry, particularly in Victoria.

“And that could rebound to other states, as Victorians may be forced to try and sell their milk to other markets.

“It could mean more Victorian product possibly being flooded into the NSW.

“That is the worry.

“I could see in a few years, the effects could be catastrophic for the producers.

“What do the Victorians do if the Chinese say they have sufficient supplies of their own milk?

“Will they have to look for other markets, like transporting it to Sydney?

“I don’t think there would be a shortage of milk in Australia, there is always sufficient to maintain domestic need, but they could come in and buy up farms and leave us high and dry.

“It could mean an exodus of farmers from the industry.”

He agreed there were huge advantages for the dairy industry to export its products to China, where the price of a litre of milk is $8 and it can go up to as much as $10 per litre.

“It’s vastly different to the 55 cents we are getting at the farm gate, which is criminal,” he said.

Mr Cochrane said most farmers received about 55 cents a litre for their milk but some were being paid as much as 60 cents a litre.

“To produce a litre of milk costs about 25 to 30 cents and while the big supermarket chains may sell our products for $1 a litre, some brands are dearer, so the processors, the middle men, are making the big dollars.”

southcoastregister.com.au