Called Mountain Milk Cooperative, the founding group — including four farming families producing a total 18 million litres a milk a year — hope to have milk on shelves by the middle of next year.
The move followed co-operative Murray Goulburn’s decision last month to sell its assets to Canadian dairy processor Saputo for $1.31 billion.
Mountain Milk Cooperative chair Stuart Crosthwaite is a fifth generation farmer and milks 400 cows at Kergunyah South.
“We felt it was time to act,” Mr Crosthwaite said.
“As farmers we want to have more control of our future, and not be directed by outside interests.”
The founding group comprises Stuart and Sarah Crosthwaite, Patrick and Kerrie Glass, Scott and Belinda McKillop and Ian and Alice Holloway.
“We are the children and grandchildren of the people who began Kiewa Milk, and who established a proud tradition of co-operative based dairy farming in the Alpine Valleys region,” Mr Crosthwaite said.
“We want to revive that tradition. We are planning to introduce a range of initiatives over the next six months which will build an even stronger link between our farms and our consumers, so people can trust their milk is coming from some of the best dairies in Australia.”
The Kiewa Valley farmers were assisted with a grant from the Federal Government’s $13.8 million Farm Co-operative and Collaboration Pilot Program (Farming Together).
Mr Crosthwaite said the co-op planned to start small.
“We will be looking to grow by taking on new members, but we need time to organise the business, create partnerships and to build a solid foundation to grow from.”
The Farming Together program appointed dairy consultant Patten Bridge to assist the group.
“Our vision is to create a new generation dairy co-operative which will provide ongoing benefit and jobs to the communities of North East Victoria,” he said.
“We are currently looking to establish partnerships with milk processors who understand our vision and who are prepared to work alongside us in making this happen. Once this is consolidated, we will be exploring options for growth and expanding our footprint in the region.”
Farming Together program director Lorraine Gordon said: “This new co-op builds on the strength of Victorian dairying and carries that legacy forward into the future.”
“These are committed farmers dedicated to their industry and their community and it has been a privilege to help them prepare for sector change.
“The Farming Together program aims to help farmers claim better margins and more say in their supply chain as well as building a stronger stake in the long-term sustainability of their enterprises,” she said.
The Farm Co-operative and Collaboration Program has launched a free online co-op builder for other groups considering forming themselves into these tax-effective structures.