Sunday, July 3, 2022

Careful planning saved milk from dumping

Contingency planning by Westland Milk Products has saved thousands of litres of milk from being dumped following the New Year weather bomb that hit the West Coast.

The event also highlighted the importance of dairy farmers ensuring they have their own insurance to cover on-farm milk losses.

With potential to lose more than two million litres of milk, the actual loss of just 400,000 litres has been praised by farmers and the milk company.

The response from the dairy industry South Island-wide had been huge and humbling, Westland Milk Products general manager of operations Bernard May said.

Contingency planning had been the key in dealing with the extremities of the weather bomb that delivered torrential rain and washed out access to many of Westland’s suppliers in an event that could have resulted in huge tragedy.

While some West Coast dairy farmers caught up in the storms were forced to dispose of uncollected milk, Federated Farmers believes contingency planning by Westland Milk had saved most from serious loss.

It was a stressful time for farmers cut off following the washout of the bridge over Wanganui River, but Westland’s contingency plan was working, Feds West Coast dairy chairman Richard Reynolds said.

While gutting to see some high-quality milk recycled as liquid fertiliser, the outcome had not been as disastrous as first thought, he said.

“Federated Farmers appreciates the hard yards put in by Westland Milk to minimise loss.”

While Westland’s contingency planning included comprehensive adverse event training, May had high praise for the industry-wide effort that saved massive amounts of milk.

“While this has been a good example of where our contingency planning has worked very well, there has been a tremendous amount of industry and community effort and goodwill in managing this event,” he said.

The bridge washout cut off 50 suppliers and it had been necessary to helicopter in satellite phones to some areas because telecommunication was also cut. At one point 4WD vehicles supplied by the Department of Conservation were used to access suppliers in remote valleys.

Dairy company Fonterra, Open Country Dairy and Synlait had come to the party, together with several independent milk tanker collection companies to assist with milk collection and processing.

At one point there were 55 tankers on the road covering thousands of extra kilometres to get milk to the Westland plant and also into Southland to Fonterra and Open Country Dairy plants for processing. In some cases the milk journey covered three driver shifts, meaning huge numbers of people were also involved.

“We are grateful to this huge support that was key to the contingency planning, that does incorporate formal agreements with other milk companies for such events,” May said.

With the West Coast spanning a similar distance to that of getting from Wellington to Auckland, but with much greater adverse weather risk and remote terrain, Westland Milk was acutely aware of the need for contingency planning.

The company had regional co-ordinators in various regions and as part of planning it would continue to establish more co-ordinators, as well as providing more inaccessible valleys with satellite phones to make life less difficult for suppliers, May said.

He stressed the importance of farmers having insurance to cover unprecedented loss of milk.

“Milk that does not make it to a factory means farmers will not be paid for it unless they have insurance in place.”

Westland had always encouraged farmers to have insurance and while many did, there were still many who didn’t. This event highlighted why on-farm business insurance was important, May said.

Milk company business interruption insurance started only after a 20-day shutdown period. Loss on farm is the farmer’s responsibility.

 

Proposal for new plant at Rolleston

A proposal to build a milk plant at Westland Milk’s Rolleston site in Canterbury is still

waiting for a resource consent decision.

A spokesperson said the proposal was alive and well and the decision on the resource consent hearing was expected any day. The consent hearing jointly before the Selwyn District Council and the Canterbury Regional Council covered land use and air discharge and the building and operation of the plant.

Depending on the outcome of the consents granted Westland Milk would look to invest about $100 million in a plant that would include three dryers to manufacture nutritional products. This would be an extension of the new nutritional plant due to be commissioned at the Hokitika site at the end of this month.

While the project had been approved by the board for the consent process it was yet to find funding and milk supply.

“It’s a case of investigation, testing the water and securing resource consents with a reasonable life for the Rolleston site,” the spokesperson said. “It could be five years and it could be 10 years before it is moved forward. It will depend on the market and how the (Hokitika) nutritional plant drives ahead.”

The proposed Rolleston plant would process up to 2400m3 of milk per day, create about 140 full-time jobs and contribute about $11 million in direct gross household income annually.

It would be located next to the existing warehouse and milk transfer operations in the Izone Industrial Park. Existing operations at Rolleston include a dry store, an administration building, milk transfer facilities and a reverse osmosis plant, which concentrates milk for transport.

The proposed plant would process raw milk into nutritional milk-based products, including infant formula, for the domestic and international markets. The plant would be developed over a number of years.

Related story: Getting back to business

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