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Australian Dairy Finds Niche in Specialty Market
June 2, 2016

Although they could not have known it, nine years ago Juliet Bateman and her husband David started on a journey that would help insulate them from the milk price war currently decimating their fellow dairy farmers.

In 2003, they started an organic dairy in Albany, Western Australia, milking beautiful Jersey cows and building a cheese factory on their farm.

“All our milk is processed on farm into a range of cheeses, yoghurt and dairy produce and sold under our label Over the Moon Organics. We milk between 20 and 30 Jerseys, most of which we have bred ourselves. We also have around 40 milking goats,” says Juliet.

While Juliet came from a rural background, David had no previous farming experience before the couple sold two properties and bought their tiny farm.

“It had a little tin shack on it, and we bought one Jersey cow for the house and started milking her. We had ideas of growing our veggies and living the good life, everything organic. Molly, our first cow, produced way too much milk for two people. So I ended up making some cheese, and some yoghurt, and it just really snowballed from there. Then we bought a couple more cows. David was studying his MBA at the time. One of his projects was to write a business and marketing plan for a potential business. He looked at whether it might be feasible to build a commercial dairy rather than just doing it in our kitchen,” explains Juliet.

At the time she didn’t know of anyone else milking their own cows and making artisan cheeses on WA, which gave them an opportunity to create their own niche in organic dairy farming.

“We never planned on becoming huge, because a farm, the equipment, the fencing, the animals … the whole infrastructure is incredibly expensive to start yourself. Fine, if you’ve inherited it. But to get it going from scratch, that’s pretty hard. So we built it up slowly and any profits we made we just kept ploughing back in to the business.”

Turns out they were really on to something. The Batemans now have 60 Jerseys, 40 of which are in the dairy and the rest are heifers and cows coming through.

“The model has worked well for us because everything we milk, we process on farm. So we’re really well protected, but we set it up to be like that because, when we first started, milk prices were really bad. Dairy farms were going out of business.”

The business produces: Jersey cow milk, sold in glass; two yoghurts; feta and a feta blend; camembert; triple cream brie; kefir, a probiotic, fermented milk drink and crème fraiche. They sell direct to retailers in the local area and into Perth, which is about 450 kilometres from Albany.

“We have a distributor for the metropolitan area. We also do the three biggest farmers’ markets in Perth on weekends. The whole farmers’ market thing has been fabulous. When we started, farmers’ markets were really just taking off. They support our retail sales, and gets a bit of publicity out there. But it also gives us direct feedback on our products from our customers. So they work really well on a lot of levels.”

This distribution structure means they don’t have to accept the milk price set by co-operates such as Murray-Goulburn or the big producers such as Parmalat. Having a premium product also insulates them from a market with declining revenue: according to research house Ibis, world dairy industry revenue is expected to decline 2.7 per cent in the 2015-16 financial year to $6.1 billion.

Although milk prices are not the greatest challenge for the business, start-up funding was. “Before we bought our farm I didn’t appreciate how much capital you need to run a farm. You’ve got sheds, tractors, water tanks, animals, yards. We had to build everything ourselves, because there was nothing here.

“It has taken a long time to get to the point where everything runs smoothly. Just getting really good genetics to have really good dairy cows is expensive. Whereas most people [with] a background in dairy, [have] all that as well as farmland and equipment [that] has been passed down through generations.”

As for the future, Over the Moon Organics is developing new products and Juliet says by Christmas they will be milking more cows than they have ever milked.

“For us the biggest thing coming up is focusing a lot more on our marketing. To this point, we’ve been lucky because basically we’ve sold everything that we’ve made. We realise now if we actually are going to ramp it up a bit and do a marketing push, we need the product behind it. There’s no point in getting out there and getting your product known, and then going, ‘Oh, sorry, we can’t supply you’.”

The idea is to build the brand, especially in the Perth market. “Where we are locally, people are great at supporting local farmers. There’s a population here of about 50,000, including the surrounding districts. But in Perth the population is a couple of million. So there’s a big market up there that we haven’t even tapped into, yet.

“But we have to get all our cows lined up at the right time. You’ve got to make sure you’re getting the milk in the vat, and you’ve got to get them calving and at peak production at the right time. It will start to come to fruition around the end of this year.”

While a life on the land is always challenging, Juliet has no regrets. “There were many other businesses we could have done that didn’t require that capital input. But I don’t think they would be as satisfying as this.”

By Alexandra Cain
Source: Sydney Morning Herald

 


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