The developers of a leading NSW dairy business have invested in two large farms in northern Victoria.
Australian Fresh Milk Holdings directors Michael Perich and Quentin Moxey spoke to a Murray Dairy dinner recently about the principles that drive their business.
Of interest to the 100 people attending the dinner was the choice of the business to invest in large properties at Coomboona and Torrumbarry.
Both men said they had some confidence in the future of dairying and they had invested in the region as part of a strategy to diversify their holdings.
The Coomboona operation, formerly partly owned by retail entrepreneur Gerry Harvey, was recently given permission to expand its herd to 4900.
The company has also purchased and aggregated farms in the Torrumbarry area to create a 4000 ha holding, which will be used to raise heifers.
Their business at Gooloogong in NSW milks about 7200 cows, and the whole business employs more than 200 people.
Mr Perich and Mr Moxey talked about their emphasis on people, their cows and their land, and how they used vertical integration in their business model, raising their own stock and growing their own crops.
“We try to align ourselves to the market and opportunities the market can afford us,” Mr Moxey said.
“If you don’t take care of your people, your cows and your land, you are shot.
“We like cows, this is why we do it. We don’t cut corners on facilities and investment or anything that will get in the way of the cows.
“When it comes to our people, we are essentially a big HR company. We spend a large amount of our time wrapping our arms around that.”
The two men explained how they were putting more structure into the business and had recently completed a strategic planning day with the staff.
“We have always tried to take care of our animals, but we have never had a robust framework to deal with that,” Mr Moxey said.
On areas like safety they were also implementing more structured policies.
Mr Moxey said they were strong believers in vertical integration.
“It all starts with growing crops; we do our own harvests. We do as much as we can, and that includes getting our milk to market.
“Integration is about how can we work together to create more value in a product.”
Mr Perich said they wanted to be in control of their product all the way through the supply chain.
“In terms of growing the feed, managing the water, managing the people, milking the cows, transporting the milk. You want to have that accountability,” he said.
“And that responsibility for the milk all the way through gives us the ability to sell that product to the end customer, because we have that accountability and responsibility all the way along the supply chain.”
Mr Moxey said northern Victoria was a significant dairy region and he believed it was going to hold some control in terms of balancing national supply.
He said the contraction of supply in Queensland and NSW meant there would be more milk moved north.
“You guys have a big role to play in balancing national supply.
“We think there are some evolving farming systems that will develop here.”
Asked about the impact of high water prices, Mr Moxey said they were moving into the area at a time when temporary water was costing $500/Ml, and they had no background in paying cheaper prices, so they were factoring this into their operations.
Australian Fresh Milk Holdings is a partnership between the Perich and Moxey families, the Chinese New Hope Group and Freedom Foods.