Northern Rivers buyer swoops on Victorian dairy farm
A NSW dairy farmer has seen good value in Victoria’s Western District, paying $3 million for Simpson Dairy Farm at Bungador.
The 216-hectare holding at 1045 and 1095 New Irrewillipe Road was offered for sale by Ausmilk Properties and acquired by Terry and Shannon Blasche, who have a dairy near Casino in the Northern Rivers area of NSW.
Ausmilk Properties is directed and part-owned by Dr Greg Walsh, an economist and chairman of Champions of the Bush, an organisation which represents business interests in regional Australia.
Property records show Ausmilk paid $5.3 million for both properties in 2007 and 2008.
Dairy farm values fell after milk processors Murray Goulburn and Fonterra retrospectively slashed prices in 2016, making many dairies unprofitable.
Under a new code of conduct, which took effect in June, all milk processors must release their opening prices for the next year at the same time. ensuring farmers know how much they will be paid over the life of a contract.
James Beer, Jesse Manuel and Jock Grimshaw from Colliers International negotiated the sale of Simpson Dairy Farm.
“The sale attracted an excellent level of interest, with multiple offers received at the end of the sale process, underpinning the strong demand for dairy farms in high rainfall areas we are presently seeing,” Mr Beer said.
“Whilst a number of dairy farms in south-west Victoria have been converted for beef and sheep grazing, the majority of enquiry for the property was from dairy farmers looking to expand their existing operations or relocate to a more reliable agricultural region.”
Simpsons Dairy Farm has current milking capacity of about 375 cows, with the ability to expand the herd through the acquisition of neighbouring landholdings.
Included in the sale were two four-bedroom dwellings and an upgraded 40-unit rotary dairy.
In its July rural property market report, valuation firm Herron Todd White said dairy was one of two markets (the other being viticulture) that continue to provide “longer term promise and significant opportunity from a value perspective”.
“These sectors have lagged behind the rest over recent years, despite also experiencing some value growth as a result of growing surrounding land values supported by the grazing sector.
“Dairy and viticulture sectors are yet to hit their straps. The long-term outlook for dairy remains favourable and corporate buyers are obviously attuned to this fact with Warakirri Asset Managements fund Aurora just purchasing the Bestons Global Foods dairy portfolio near Mount Gambier for circa $40 million, displaying significant confidence in the sector,” said Herron Todd White.
Michael Harvey, senior dairy analyst at Rabobank, said as part of the bank’s August agribusiness monthly report that dairy markets had performed better than expected compared with Rabobank forecasts with prices holding up well for Oceania exporters.
“However weakness in dairy product pricing has gained velocity in a number of markets in August,” he said.
“With the New Zealand season about to hit its straps, all eyes will be on China’s import demand.”
