NORCO hopes to export 20 million litres of fresh milk to China each year after the successful trial of a new "cold pipeline" that saw almost 1000 litres delivered within seven days.
To achieve this feat, Norco - in conjunction with Dairy Connect NSW and international export consulting company Peloris Global Sourcing - negotiated an unprecedented quarantine clearance arrangement with China.
The agreement condenses the lengthy testing and quarantine processes, both in Australia and China, reducing the export time from between 14 and 21 days to within a week.
Before the cold pipeline, most milk exports to China were long-life, treated or powdered milk.
We haven't got a 20-million litre contract, but we have got a lot of interest and we are confident that it will build up to that
Norco chief executive officer Brett Kelly said the cold pipeline opened the door to service the rapidly growing Chinese demand for fresh milk.
"There is a huge middle class that are very wealthy, very educated and very astute in China that want Australian dairy products. They see Australia as the top of the list," he said.
"We haven't got a 20-million litre contract, but we have got a lot of interest and we are confident that it will build up to that."
Within a few years, Mr Kelly said Norco could have a strong Chinese export market, hopefully increasing the price farmers got paid for their milk.
Norco has a new contract with Coles kicking off in July and, to meet demand, Mr Kelly said the co-operative had increased production from Northern Rivers members and taken on 60 new farms in Queensland.
"If we can grow the export business while we continue to build our domestic business, that will lead to more supply, more members, more volume, better prices, more rural stores, and that creates more jobs."
NSW shadow primary industries minister Steve Whan and the Queensland Dairyfarmers' Association both applauded the move.
"The opportunity for fresh milk exports is exciting and has great potential, with the benefits flowing directly to NSW farmers," Mr Whan said.
"This could be a real game changer," Qld Dairyfarmers' Association president Brian Tessmann said. "This is especially the case for the northern dairy industry, including NSW and Queensland, where we predominantly specialise in fresh drinking milk production."