By: Prime Dairy
Australian dairy farms as an alternative investment sector seem well-positioned for the future due to a lift in domestic dairy consumption combined with a decline in dairy production, according to an alternative investment expert.
Harrison Stewart, Senior Investment Analyst for Prime Dairy, part of fund manager Prime Value Asset Management, said consumer resilience had shown to be strong in the face of cost-of-living pressures. “Part of dairy’s strength as an alternative agricultural investment is creating regular income returns through sales, and this is underpinned by the consumer.
“Seeing an uptick in dairy consumption, at a time when many households have been cash-strapped, shows underlying resilience in the dairy market. Dairy Australia’s Situation and Outlook report from mid-2025 showed strong growth in sales value and volume across all four dairy products (milk, cheese, yogurt, and butter) over the last year.
“Demand for dairy product also continues to grow globally. The International Dairy Federation projects a potential shortfall in global dairy production of 30 million tonnes by 2030 based on current consumption trends.”
Meanwhile, Rabobank’s Global Dairy Quarterly, released September 2025, said a marginal fall in Australian milk production has influenced higher farmgate milk prices, with prices already around 10 per cent higher than last year’s closing dairy price.
Mr. Stewart said there’s potential for more growth in the dairy price. “This growth in domestic consumption while Australia’s milk production is reducing, positions Australia’s dairy farmers well into the future. It may also put more upward pressure on the milk price.”
For investors, dairy delivers regular income from milk production combined with capital growth from the underlying land. But there are few ways to access this asset class efficiently, according to Stewart. “Dairy is the third largest rural industry in Australia, it was worth $6.2 billion in 2024, and has a lot to offer investors as an alternative asset class.
“A starting cost for buying a farm directly is at least $5+ million, plus costs for livestock and equipment – this means a diversification into dairy or agriculture is out of reach for most investors.”
The Prime Value Dairy Trust was launched to meet a growing demand for dairy assets, and since 2019 has grown to become one of Australia’s biggest producers, recently surpassing more than 10,000 cows across its farms. “Dairy is a bit different from most other agricultural assets – there is potential for greater consistency of income than grain, crops and beef, which often only give you one shot a year at sales. In Dairy, we milk the cows every day with a committed annual milk price, providing more control over performance.
“It’s important investors to take a long-term view, as any agricultural product may experience seasonal fluctuations due to weather conditions.
“A long-term view is also required for the underlying land values”, Stewart said. He said a prime example is the performance of Tasmanian farmland, which may fluctuate year-to-year, but has grown by an average annual rate of 10.3% over the last 20 years, according to the Bendigo Bank Farmland Values Report for 2025.
In addition to land value growth, the Global Dairy Trade index has risen in excess of 8% per annum on average for the last 10 years.
Prime Value Asset Management was founded in 1998 and is part of an investment group including Shakespeare Property Group, managing ~ $3 billion in equities, income securities, direct property and alternative assets.
For more information please contact:
Harrison Stewart
Senior Investment Analyst, Alternatives Assets
Prime Dairy
Phone:
Email: hstewart@primevalue.com.au
David Manallack
Manallack PR
Phone: 0407 334 938
Email: david@manallack.com.au
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