The province�s dairy sector is entering the specialty cheese market with a new business initiative that will see the establishment of a cheese manufacturing line at the Central Dairies facilities in Mount Pearl.

The Provincial Government will invest $1 million under the Agriculture and Agrifoods Development Fund (AADF) to assist Central Dairies in the expansion into the specialty cheese market. Central Dairies is contributing $2.5 million toward the venture, which will create 10 to 15 new jobs.

"This expansion provides another market for our industrial milk, which will encourage increased production by our dairy farmers and result in meaningful jobs in rural areas of the province," said the Honourable Kathy Dunderdale, Minister of Natural Resources. "This investment is consistent with this government�s approach of making strategic investments to diversify the economy and create long-term employment and demonstrates our commitment to this important industry."

The AADF is a $4-million program established last year to encourage the development, diversification and expansion of large-scale agricultural projects. Budget 2007 continues the Provincial Government�s $4-million commitment to this program for this year, as well as funding for a position to administer the program.

"We are looking forward to the opportunity to build the specialty cheese category," said Dave Collins, vice-president and general manager for Central Dairies. "In addition to providing quality dairy products to consumers within our province, we will now have the capability to process products in a growth category and market them across the country and beyond. We commend government for initiating this type of program without which this project could not proceed."

Central Dairies is expecting sales in the range of $5.3 million to $10.3 million annually in the first seven years of operation. As part of the initiative, Central Dairies will purchase 4.7 million litres of industrial milk from local dairy farmers at startup, with that volume expected to at least double by year seven.

The province�s dairy farmers joined the National Milk Marketing Plan in 2001 and were allocated an annual share of the national Market Sharing Quota. The province is more than half way toward its goal of producing 31 million litres of industrial milk by 2016.

"Dairy Farmers of Newfoundland and Labrador are very pleased to see Central Dairies and our Provincial Government investing in the expansion of cheese production in the province," said Robert Walsh, chairperson of the Dairy Farmers of Newfoundland and Labrador. "Until now, much of the growth of the milk quotas in this province has had to be shipped out of the province for further processing. This project will result in significant transportation cost savings for dairy farmers in this province and will allow the industry to continue the expansion that began in 2001."

"By supporting this expansion, the Provincial Government is ensuring the province�s dairy industry continues to receive the maximum economic benefit from industrial milk production and secondary-processing opportunities," Minister Dunderdale said. "It also substantially reduces the transportation costs associated with getting the industrial milk to market by increasing local consumption."

AADF is the same program under which government invested $1 million in November 2006 to assist Brookfield Dairy Group to expand its premium ice-cream production operation, again utilizing industrial milk from the province�s dairy farmers.

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Statement by Honourable Kathy Dunderdale

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2007 05 17                                                 10:05 a.m.