Circular Head Farms, founded in 2014 by dairy farmer Steven Fisher, paid $10 million for the 352-hectare dairy to add to six farms and more than 1000 hectares owned by the community investment group.
Whitewater Dairy was part of a portfolio of four dairies offered for sale in 2017 by Whitewater Dairy, a company majority owned by Ross Brown from Sydney and local dairy farmer Tony Clarke.
“I am not a fan of foreign ownership of farms. It’s pretty disappointing that about 70 per cent of the milk produced here comes from foreign corporate-owned farms,” Mr Fisher told The Australian Financial Review.
“Rather than kick and scream, I decided to do something about it.”
Circular Head Farms is set up as a unit trust. Mr Fisher’s own farm was the first property to go into it, and about 40 local investors are now on board.
“Our investors are people who are passionate about what we are doing and who don’t want to sell out to overseas interests,” he said.
The dairies are operated under a share farming model that gives locals a pathway into the industry and a way to acquire equity in the cattle herd as well as invest in the unit trust.
CHF’s latest capital raise attracted $9 million, with amounts ranging from the $100,000 minimum up to $2 million.
“We’ve kept it pretty low-key, but it’s started to gain momentum,” Mr Fisher said.
Units in the trust started at $1 each and are now worth $2.18, valuing the trust at about $30 million.
It pays only a small dividend of 1-2 per cent, with money reinvested into growing the business, which milks about 4700 cows and produces more than 1.6-million kilograms of milk solids.
One of Tasmania’s and Circular Head’s biggest dairies, family-owned Corrigan Dairies, sold in June to a New Zealand corporate buyer.
The dairy, owned for about 20 years by Norm and Nancy Corrigan, milks 3000 head of cattle across 9186 hectares, with supply going to Fonterra.
Veteran Circular Head agent Tony Maguire from Nutrien Harcourts, who sold Corrigan Dairies and Whitewater Dairy alongside Nutrien Harcourts Tasmania director John Hewitt, told the Financial Review the better dairy farms were attracting between $25,000 to $30,000 a hectare.
“During the drought on the mainland, a lot of cattle were sent down to Tasmania on agistment,” he said. “The owners made periodic visits to check on their cattle and it opened their eyes to how a good country this is and how much grass it grows.
“I’ve been selling here for 23 years and have bemoaned the fact the north-west coast – Circular Head – is relatively undiscovered. It’s not the case now.”
Mr Hewitt said the Tasmanian dairy industry was performing strongly with production rising, in contrast to the more challenged Northern Victoria dairy region, hit by drought and high water costs.
“We have good water security, a good climate and good processors in Tasmania,” he said.
Two other Circular Head dairies have sold in the past few months.
Drift Inn Dairy Farm, on about 238 hectares and milking over 500 cows, sold for $6.8 million to a Queensland couple. Roger River Dairy, on 665 hectares and milking 930 cows, sold in June for an undisclosed price.
