The only publicly listed dairy farming company in Australia, Australian Dairy Farms (ADF), plans to take advantage of the ‘generational shift’ within the sector and acquire between fifteen and twenty farms in Victoria in the next 18 months, with the goal of forming a large standardized business that will be able to boost production and take advantage of that scale to negotiate higher milk prices.
The company acquired its first two farms in October 2014, and to date has acquired two additional farms and is conducting due diligence on eight more. By end of June 2015 the company aims to have acquired eight to ten farms.
In the end, the recent announcement by the Australian government on tighter regulations regarding agricultural investments is a positive for ADF. The company is highly dependent on foreign investors, but because ADF is a listed Australian company, foreign investors can gain access to the country’s dairy sector through investing in the company without government scrutiny.
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