Queensland Dairy Farmers Could be Paid More for Their Product

 ABC Online reports that the factory will incorporate Queensland's first infant formula plant and aims to produce more than 30 million tins of infant formula a year, destined for Asia via Toowoomba's Wellcamp Airport.

Toowoomba Premium Milk executive chairman Steve Laracy said a building contract was signed this week and that construction on stage one of the factory would begin in January.

He admitted the current retail price of milk was unsustainable for producers.

Confirmation of the new plant's construction comes as yet another Queensland dairy shuts its gate, blaming the $1-a-litre milk campaign and lack of support from processors.

Scenic Rim farmer Wally Holcombe will milk his last cow before Christmas, ending a 64-year family business.

"If farmers could generally get 10c a litre more for their milk, our industry would kick along quite well I imagine," he said.

"The last time branded product was worth $1 a litre was 1992, and that year petrol was worth 60 cents a litre and average wage was $650 a week," he said.

Mr Laracy said he hoped their milk factory would offer some hope to farmers, with stage two — a wet milk plant — set to process about 200 million litres of milk a year.

Half of that milk will be sourced in Queensland, the other half will come from the facility's own dairy farm.

"We want to pay them a better price than they're getting now and that's just a sustainability thing," he said.

"Pricing now is not sustainable."

There are just over 400 dairy farmers left in Queensland, with one third of the state's milk now trucked in from Victoria.

Mr Holcombe said the equation made no economic sense.

"At the moment Queensland is a net importer of milk every day... milk is short, yet our returns are still going down," he said.

Subtropical Dairy chairman Paul Roderick said innovation was critical in keeping the industry sustainable and Mr Laracy's pricing plan could only be a good thing if it came to fruition.

"They'll have to pay a competitive price and probably a price beyond what current processors are paying to secure some milk long term," he said.

Mr Holcombe said while he welcomed the idea, he believed the cheap supermarket milk war would continue to kill the state's dairies.

"A lot of us do wonder why anybody would build a milk factory in a state that's already short of milk," he said.

"But I suppose if it does go ahead, it will increase returns to farmers."

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