This article is from the Australian Property Journal archive
THE dairy arm of Melbourne-based fund manager Prime Value Asset Management, Prime Dairy, has entered an unconditional contract to acquire a 700-hectare farm in northwest Tasmania.
The dairy farm at Woolnorth, around 37km north-west of the town of Smithton, is the latest “inside the gate” purchase by Prime Diary in a buying spree commenced by the group in 2020 and finalises the dairy assets for the Prime Value Dairy Trust, which closes to new investors on 30 June 2024.
“We have achieved what we set out to do in 2019, having built a dairy business across 5,000 hectares in northwest Tasmania and Southwest Victoria, and have enough land to have reached our goal of 10,000 dairy cows,” said Kirsti Keightley, general manager of dairy investments at Prime Dairy.
“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 also acquired 11 “outside the fate” farms from Van Dairy in 2021, establishing the group’s presence in Tasmania.
“We’re now seeing the rewards from significant investment in the region, which we first commenced in 2020 and ramped up in 2021. Our dairy production was up 35% over the last year, which will improve profits, and we expect significant further growth to come,” added Keightley.
“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.”
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.
Rural Bank’s recent March Insights, revealed diary has seen a 2% increase on this time last year, with 4.6 billion litres of milk at the halfway point of the season. Though this is still 4.5% below the average.
“Australia has a growing population and needs 70-75% of its dairy production just to meet local demand. There is also a strong export market for more quality dairy product,” said Keightley.
“These dynamics, along with the Dairy Code of Conduct and the minimum dairy price are driving more growth and confidence across the industry.”
