Tasmanian dairies that supply Murray Goulburn up for sale

17 Nov, 2017 04:00 AM
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The portfolio includes Mawbanna Dairy in north-west Tasmania
The portfolio includes Mawbanna Dairy in north-west Tasmania

A portfolio of four large-scale dairy farms in north-west Tasmania that supply milk to Murray Goulburn has been listed for sale with price expectations around $30 million.

Covering more than 1500 hectares and milking almost 3500 cows, the portfolio comprises the Seamont Dairy in Montumana, the Whitewater Dairy in Edith Creek, the Mawbanna Dairy in Mawbanna and the Cuba Road Dairy in Smithton.

The portfolio was brought together by UK dairy farmer Matthew Gunningham and his wife Pippa who arrived in Tasmania in 2001 and amassed three farms covering 900 hectares and milking 2600 cows under the Gunningham Farms banner.

They later added a fourth farm in 2011 after being approached by external investors. The major shareholders in Whitewater Dairy Pty Ltd are Ross Brown from Sydney and local dairy farmer Tony Clarke with the Gunninghams holding a minority stake.

Conditions in the dairy sector have started to improve this year driven by surging butter and whole milk powder demand. In 2016, many dairy farmers went broke or struggled to stay afloat after both Murray Goulburn, and rival Fonterra made a shock cut to milk prices.

In June Murray Goulburn lifted its initial milk pricing offered to farmers after rivals offered them higher prices.

Selling agent John Hewitt from Landmark Harcourts Tasmania said the interest shown in Murray Goulburn - Canadian giant Saputo is poised to acquire it for $1.3 billion, subject to regulatory approval - was "positive news" for Tasmania's dairy sector.

"The amount of interest in Murray Goulburn has given the market confidence that we will have good competition from processors," Mr Hewitt said.

"These are large scale established dairies in magnificent settings in one of the best if not the best dairy areas in Australia."

He added that dairies such as these with pasture-based systems, supported by high rainfall and effective irrigation, allowed for low-cost milk production.

"We are expecting these farms (which can be purchased separately) will appeal to a wide range of corporate investors and will make around $30 million," he said.

The more favourable conditions are bringing other dairy farms to market. In September Bembaala Farms, a 930-hectare aggregation in Victoria's Goulburn Valley, was put up for sale asking around $18 million.

AFR

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