THE race has began to secure up to 150 million litres of milk in South Australia next season - mostly in the state's southeast.
The Weekly Times understands this milk could be picked up by any company at the end of June, since it is no longer needed by processor Lion.
Early last year Lion confirmed the sale of its Jervois and Murray Bridge processing plants would mean its annual milk requirement for South Australia would drop from 280 million litres to 100 million litres. However, now the excess milk is believed to be about 150 million.
Managing director Tony Esposito said he would "absolutely" like that 150 million litres and more.
"We have two factories that can process up to 400 million litres of milk," Mr Esposito said.
"That's our aim in the next three to four years, to get there or above."
Mr Esposito confirmed UDP had approached farmers directly and that Dairy Farmers Milk Cooperative, which supplies milk to Lion in South Australia, was one of the parties to whom UDP was talking about supply.
He would not comment on farm-gate prices, saying he would wait until it was closer to the start of next season to determine a more accurate price. Across the border Murray Goulburn and Warrnambool Cheese and Butter are expected to try to build on their South Australian supplier bases by recruiting Lion and DFMC farmers when supply contracts cease at the end of June.
WCB would not comment, but a Murray Goulburn spokesman said it was "keen to talk to any dairy farmers in SA or western Victoria who wish to discuss joining the co-operative".
"We will host meetings in the region," he said.
DFMC chairman Ian Zandstra was tight lipped about future supply arrangements. He also did not wish to comment on volumes of milk that would or wouldn't supply Lion next season.
"Currently DFMC suppliers are contracted to Lion," he said. "In the future DFMC, as a co-op, can't tell farmers to leave (the co-operative).
"Therefore future milk supply outcomes will be dependent upon the required volume to supply Lion, the evolving arrangement with UDP and the nature of the overall competitive landscape for suppliers."
Lion spokeswoman Julia Fraser said: "Lion will and has secured over 100 million litres for its requirement in South Australia.0 This is made up of a mix of direct Lion supply and DFMC supply."'
Ms Fraser said Lion would not discuss the volume split, but The Weekly Times believes about 40 million litres of this milk - about 30 suppliers- will be direct Lion suppliers.