Aurora Dairies, one of the largest milk producers in the country, has added Gray Wigg Gault’s Clydebank Aggregation in Victoria’s Gippsland region to its expanding portfolio for around $20 million.
Just east of Sale and around 225 kilometres from Melbourne, the dairying venture spreads over 1.273 hectares and supports a milking cow herd of 2800 head. The acquisition comes during a period of near-record farmgate milk prices.
Aurora is managed by Warakirri Asset Management and backed by Canada’s Public Sector Pension Investment Board. The Clydebank Aggregation is the second piece of the Gray Wigg Gault holdings Aurora has swallowed, as it builds up a dairying platform across Victoria and south-east South Australia.
Last year, Aurora acquired its first group of Gray Wigg Gault dairy farms at Nambrok and Winnindoo, also in Gippsland, for more than $55 million. The Canadian-backed Aurora operation had already added scale to its operations earlier last year, acquiring Bestons Global Foods dairy portfolio of four farms near Mt Gambier for around $40 million.
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It is a busy market for major dairy investment. Duxton Asset Management has contracted buyers for six of the farms in its Victoria-based Ace Dairy Holdings, with negotiations on the remaining three close to being finalised.
Underpinning that investment interest is the healthy on-farm profitability being enjoyed by Australian dairy farmers, according to Rabobank’s senior dairy analyst, Michael Harvey.
“Near-record milk prices, affordable purchased feed prices and supportive seasonal conditions have set many up for positive trading conditions ahead,” Mr Harvey said last month at the release of Rabobank’s quarterly global dairy bulletin.
The Clydebank Aggregation sold in line with expected offers, at around the $20 million mark. Brokered by LAWD’s Col Medway and Tim Corcoran, the properties come with significant water entitlements from the surrounding irrigation district, along with groundwater sources.
“This sale continues the strong sales of dairy assets in wider Victoria and specifically the Gippsland region,” Mr Medway told The Australian Financial Review.
“The renewed interest in dairy is not surprising considering the complete turnaround in the seasonal conditions coupled with the improved milk price, resulting in profitability rebounding.”
Around 680 hectares of the Clydebank Aggregation have been developed for irrigation through overhead spray irrigators while there are another 55 hectares of laser levelled flood irrigation area. There has been considerable investment in infrastructure as well, with four herringbone dairy complexes, with calf sheds, machinery sheds and hay sheds.