Prime Dairy has an unconditional contract to acquire a 700 hectare ‘inside the gate’ dairy farm at Woolnorth, north-west Tasmania, the latest acquisition as part of a buying spree in the region which the group started in 2020.
Prime Dairy is the dairy arm of Melbourne-based fund manager Prime Value Asset Management, which also manages agriculture, equities, income securities, direct property and other alternative investments.
Kirsti Keightley, general manager of dairy investments for Prime Dairy, said the latest purchase finalises the dairy assets for the Prime Value Dairy Trust, which closes to new investors on June 30.
“We have achieved what we set out to do in 2019, having built a dairy business across 5000 hectares in north-west Tasmania and south-west Victoria, and have enough land to have reached our goal of 10,000 dairy cows,” Ms Keightley said.
“This latest ‘inside the gate’ purchase adds significantly to our Tasmanian holdings, which are some of the best dairy producing land in Australia.”
Prime Dairy built its Tasmanian presence in earnest when it acquired 11 ‘outside the gate’ farms from Van Dairy in 2021.
Since then, Prime Dairy committed significant capital expenditure which is now delivering strong dairy production.
“We’re now seeing the rewards from significant investment in the region, which we first commenced in 2020 and ramped up in 2021,” Ms Keightley said.
“Our dairy production was up 35 per cent over the last year, which will improve profits, and we expect significant further growth to come.
“We now have the assets to grow more grass and to achieve more high quality dairy production.
“There is enough support land to winter all our cows and to grow young stock.
“We have built huge new effluent dams and pivot irrigations, and have significantly reduced the need for chemical fertilisers.”
Ms Keightley said the supply and demand dynamics in Australia would continue to support dairy farmers.
“Australia has a growing population and needs 70 to 75 per cent of its dairy production just to meet local demand. There is also a strong export market for more quality dairy product.
“These dynamics, along with the Dairy Code of Conduct and the minimum dairy price are driving more growth and confidence across the industry.”
The Prime Value Dairy Trusts target a minimum 12 per cent return over the medium-to-long-term, including distributions of 5-7 per cent paid quarterly, with returns derived from a combination of regular income from milk sales and land value appreciation.