Washington fund backs Tas dairy buy up

15 Aug, 2018 02:00 PM
Comments
0
 
The Laguna Bay Agricultural Fund 1 has acquired eight separate dairy farms around Smithton, Tasmania, from private farmers.
The farm purchases are finalised and the operation was now milking 6400 cows with a target of 10,000
The Laguna Bay Agricultural Fund 1 has acquired eight separate dairy farms around Smithton, Tasmania, from private farmers.

An Australian agricultural fund backed by the $US129 billion ($176 billion) pension fund – the Washington State Investment Board – has purchased more than $50 million worth of dairy farms in Tasmania's north west.

The Laguna Bay Agricultural Fund 1, which has raised $313 million from a mix of offshore investors including the Washington pension fund, acquired eight separate dairy farms around Smithton, Tasmania from private farmers.

Laguna Bay director Tim McGavin said the farm purchases were finalised and the operation was now milking 6400 cows with a target of 10,000 cows.

"We have paid fair market value for the properties," Mr McGavin said, "We are expecting a higher cash yield from these properties than capital gains."

All up, the Laguna fund's dairy holding in Tasmania spans more than 4000 hectares. The fund has entered into a joint venture with Ashley and Cherrylyn Ker to acquire, run and develop the dairies in the Circular Head region of Tasmania. The dairy farms are within a 15-kilometre radius of each other.

Advertisement

The dairying business is named 40 South Dairies and derives its return from a low-cost grass-based dairy production system located in one of most reliable pasture production areas in the southern hemisphere with ample access to surface and bore water for irrigation.

Mr McGavin said that the investment had been difficult to bed down due to Foreign Investment Review Board rules.

"The new FIRB 30-day marketing rules all make this type of investment very difficult," he said.

He said such difficulties could have a lasting impact on the way farm investment was made in the future.

"I think it will mean that we get less farming aggregations like this in Australia and Australia will suffer from scale problems, especially as farmers get older and more family farms are sold.

"Our investors have given us a mandate that allows us to invest across a wide range of enterprises, geographic regions and up and down the supply chain," Mr McGavin said.

Laguna Bay is also the trustee of the Adveq Almond Trust (AAT2) which owns one the largest almond orchards in the world in northern Victoria. The Orchard is currently subject to a sale process.

The Washington State Investment Board controls about $US16.7 billion in real estate around the world. It manages investments for 17 retirement plans for public employees, teachers, school employees, law enforcement officers, firefighters and judges.

AFR

POST A COMMENT


Screen name *
Email address *
Remember me?
Comment *
 
Best management practice of ryegrass and managing the residual height throughout dry periods is critical to enhance persistence of pasture. 
26 Dec 18 Best management practice of ryegrass and managing the residual height throughout dry periods is critical to enhance...
A new definition of 'genetically modified' currently awaiting parliamentary approval could see a swathe of new grasses on the market within three years.
13 Nov 18 A new definition of "genetically modified" currently awaiting parliamentary approval could see a swathe of new...
light grey arrow
What I find confusion and strange is that the NEW AUSTRALIAN DAIRY PLAN has not got any form or
light grey arrow
I am so looking forward to this milk! I have been waiting a long time for it to be on the
light grey arrow
Don't fall for the processors changing their contracts. They can change them back again without
Spending $2.7million to build a new dairy is part of a rolling upgrade and improvement plan for VAN Dairy Group, located at Cape Grim, Tasmania.29 Dec 18 Spending $2.7million to build a new dairy is part of a rolling upgrade and improvement plan for VAN Dairy Group,...
Australian Dairyfarmer's Jeanette Severs checked out the range of new and interesting products and services on show at the South Gippsland Dairy Expo in September, while Peter Roach caught up with suppliers at the Elmore Field Days in October.02 Dec 18 Australian Dairyfarmer's Jeanette Severs checked out the range of new and interesting products and services on show...
Australian farm chemical manufacturer Nufarm has repaired its balance sheet and is now hunting for acquisition opportunities.25 Sep 16 Australian farm chemical manufacturer Nufarm has repaired its balance sheet and is now hunting for acquisition...
Monopoly market may confront cropping sector under mega-merger proposal.22 Sep 16 Monopoly market may confront cropping sector under mega-merger proposal.