VALUE-adding is where the future of the dairy industry rests, according to newly-appointed Murray Goulburn Co-operative chairman Grant Davies.
Mr Davies, who milks 520 cows with his wife Barbara and son Brett on the Murray River, south of Swan Hill, said his vision mirrored that of the company's strategy to increase its value-adding activities.
"We export 55 per cent of our product and sell 45 per cent on the domestic market," he said.
"We need to be able to value-add to the core products.
"Also, something that's been very much on farmers' minds the last few years is volatility in the market. The challenge now is to try and take some of that volatility out of the market."
Mr Davies said a switch away from selling bulk commodities such as butter, skim-milk powder and whole-milk powder into higher-value stable products such as milk-protein concentrates and nutriceuticals would help achieve both aims.
Mr Davies said the mood of dairy farmers in northern Victoria, which produces 30 per cent of Australia's milk, had changed since March, when crisis meetings were held across the region as farmers tried to come to grips with continuing drought, price cuts and the prospect of continued low water allocations, high feed prices and low milk prices.
"I believe the north is the land of opportunity," he said.
"With feed prices in line with milk prices, there is the ability to hopefully at least break even this year.
"Now we've got feed, grain and look like we'll have a pretty handy water allocation, which sets us up for the autumn and potentially next spring."
Mr Davies said farmers in southern Victoria, while facing low milk prices, had at least had the benefit of good seasons.
He was pleased the co-operative had been able to pass on four price step-ups so far this year, the latest last week.
"That will ease the pressure off everyone," he said. "It gives everyone some hope."
Mr Davies joined the Murray Goulburn Co-operative board in 2004 and was appointed deputy chairman in 2007.
