News & Events

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New Zealand Investors

The Murray Dairy Region is one of the largest dairying regions in Australia, producing 22.5% of national supply. Straddling the Murray River from the Alps to Swan Hill it covers the Northern Irrigation and North-East regions of Victoria and the Riverina and Upper Murray regions of New South Wales.

The region has a total population in excess of 350,000 with eight major towns that have a population near 10,000 or greater, in addition to the regional centres of Shepparton (pop. 30,000), Albury-Wodonga (pop. 72,000) and Bendigo (pop. 90,000 - approx. 1 hour to the south). The large population base sees the region very well serviced with health and education facilities including universities and TAFE colleges.

An Ideal Lifestyle

An idyllic Mediterranean lifestyle awaits you in the Murray Dairy region. Take full advantage of the major tourist towns along the Murray River including Swan Hill, Echuca and Cobram. Fine restaurants and excellent sporting facilities, including some of Australia’s top ranking golf courses, are common place and provide recreational activities for the whole family.
Hire a houseboat and explore sandy beaches, bushland and red gum forests along the mid Murray or wade in and enjoy fly fishing in the upper reaches of the Murray. Enjoy the internationally renowned food and wines of the Alpine Valleys, Goulburn Valley, Heathcote and Bendigo wine regions.

Milk Price

In Australia there is generally no up front share costs to supply a milk company, which reduces the amount of capital required to start a dairy operation compared to New Zealand. However, some of the milk cooperatives may have a share off take that makes up part of the payment for milk and provides an opportunity for farmers to grow equity in the milk company they supply.
Milk Price is commonly determined as:

Payment = Fat ($/kg) + Protein ($/kg) – Volume Charge (c/litre)

Individual milk companies will have some price variances according to milk quality premiums, size and growth incentives.

The key difference to New Zealand payment calculations is the relatively lower ‘Volume Charge’, at approximately 2.8 cents per litre in Australia.

Milk Price (Converted)

See how a projected milk production in Australia will convert back into NZ dollar terms by using the Milk Price Converter below. Input production, exchange rate and net milk price and see the conversion back into NZ dollars.

Competition for Supply

Australia has a relatively stronger and more stable milk price than New Zealand, driven by two key factors :

1 Not as directly linked to the export market as NZ, with 50% of Australian production sold to the domestic market; and

2 Greater range of milk processors results in an increased competition for supply.

Competitive Advantages

Productivity
The Murray Dairy region is one of Australia’s most productive dairy regions. Farms are smaller, yet carry more cows and produce more milk than the national average. The higher productivity of farms in the region is due to the Mediterranean climate, access to a reliable irrigation supply and proximity to fodder and grain growing regions.

Description	Murray Region	National
Size
Number of Cows	253	242
Land Area	167 ha	205 ha
Production
Milk Volume	1.48 m litres	1.21 m litres
Milk Solids	104,000 kg	85,000 kg
Milk Solids/Cow	411	351

 

Grain & Hay Availability

Most of the Murray Dairy region is located within 100 – 200 kilometres of major grain and hay producing regions. This is a key competitive advantage as it reduces the transport cost of supplementary feeds relative to other Victorian and Tasmanian dairy regions, while also providing feeding opportunities unique to the region.

Land

Purchase Price

Farms in the Murray Dairy region on average have the highest productivity of all Australian dairy regions, but at the lowest initial capital requirement. Operational dairy farms can be purchased at common market prices ranging from $10 to $15 per kg of Milk Solids, depending on the level of development, location and soil quality. For this price the Murray Dairy region is the one location that can genuinely deliver year–round pasture growth, if that is the system you wish to pursue.

However it is important to note that Australian dairy farmers commonly import 25-30% of their annual feed requirement in purchased grain and hay. In addition, Australian dairy farmers commonly do not rear young stock on the milking area, often either owning a ‘turnout block’ or using agistment. Therefore historical supplementary feeding levels and carrying of young stock need to be taken into context when comparing properties on a $ per kg of Milk Solids basis.

Climate

The Riverina and Northern Irrigation regions enjoy a true Mediterranean climate, with low humidity and high sunlight hours. The region boasts to have more sunny days than the Gold Coast in Queensland that encourages life in the great outdoors. The climate in the region is not only favourable for pasture growth but the region also provides ideal conditions to milk dairy cows. The dry climate and low humidity allows for ease in cow management.
The dry climate means that laneways are easier to maintain and dealing with pugged paddocks is a rarity. Summers with low humidity provide practical management options such as the provision of shade and sprinklers in yards or feeding pads to combat high summer temperatures.

Irrigation

There are three main storages that supply irrigation water to the Murray Dairy region, namely Lakes Eildon, Hume and Dartmouth. These storages are predominately fed from rainfall runoff occurring from mid winter to mid spring.

Testimonials

Lindsay Hamilton
Moved to Australia from Southland 11 years ago to dairy farm at Undera in the Murray Dairy region. Now milking 230 cows at Waaia, with plans to increase numbers to 300 for the 2008/09 season, having recently purchased a neighbouring property.

“I see many excellent investment opportunities in the Murray Dairy region, particularly in the current environment. Numerous quality dairy properties are on the market at quite reasonable prices, with strong potential for efficient production and future capital gains. The returns on investment that can be achieved in the Murray Dairy region are just not possible any more in New Zealand.”

“The opportunities in the Murray Dairy region are particularly relevant to younger farmers due to the relatively lower capital required to get into farm ownership, both for the property purchase and in the absence of a milk company share investment.”

“The achievable pasture harvest here is approximately 35% higher than where I came from in New Zealand, with irrigation and a pleasant climate the key drivers. The climate here also allows for a better lifestyle, including year-round sports and outdoor activities.”

“One of the major advantages of the Murray Dairy region is flexibility in the dairy systems that can be operated, all of which can be profitable under good management. Also, there is considerable choice of dairy companies to supply, allowing opportunity to select the processor that best suits your production system.”