Australian dairy farms – the bull run is on – The Property Chronicle
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Australian dairy farms – the bull run is on How has Australian dairy farming come of age?

The Farmer

The global agricultural investment spotlight has moved ‘down under’ and is fixed firmly on the Australian dairy farm sector. Long overlooked as the ‘poor cousin’ of the agricultural sector, Australian dairy is now coming of age. Cattle stations, broad-acre cropping properties, wool and lamb-producing grazing properties and permanent row crops like citrus and almond orchards have been the darlings of the investment community as institutional money has flowed into the great southern land. But in recent months the focus is increasingly on the nation’s dairy farms – and for good reasons.

Located on the best arable land, access to huge and growing markets, consistent cash turnover and consistent capital growth that historically produces 6%+ returns, have institutions with their rulers out. The Asian food boom underpins the rising tide that is the Australian dairy sector. Recent market research from Euromonitor International shows that by 2020 China will overtake the United States as the world’s largest dairy market, and more than 60% of all new dairy sales in the next five years are expected to be generated in the Asia Pacific region. All that’s happening right in Australia’s backyard where Australian dairy products are in high demand.  Such is the growing demand for agricultural commodities from Asia that farming is now firmly entrenched as Australia’s biggest contributor to the nation’s GDP – and the fastest growing sector with a 23% growth in the 2 year period of 2016 / 17.

Australia exports 50% of its dairy production and it has capacity to increase production to meet demand. Many view an investment in Australian dairy farms as a proxy investment in the Asian food boom – with little of the risk. While China is the largest and most exciting market for Australian dairy, the nation’s processors have extensive footholds in the other booming regional markets including Indonesia, Japan, Thailand, Korea and Vietnam. As these markets grow, demands are being made of Australia to increase supply – and the dairy industry is set to respond.

The Farmer

About Jeremy Bayard

Jeremy Bayard

Jeremy Bayard is the founder and Managing Director of Ace Farming Company – Australia’s largest dairy farming company that operates more than 25 farms and milks approximately 16,000 cows.

Articles by Jeremy Bayard

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