Laguna Bay Pastoral Company has purchased eight dairy farms in north-west Tasmania through the Laguna Bay Agricultural Fund I, in a deal worth more than A$50 million ($37 million; €32 million).
The fund partnered Ashley and Cherrylyn Ker to purchase and operate the dairies in the state, which are all located within a 15-kilometer radius of each other near Smithton and cover more than 4,000 hectares in total.
Laguna Bay Agricultural Fund I is backed by overseas investment and the money for these purchases was sourced from North American pension funds, including the Washington State Investment Board, Agri Investor understands.
Speaking to Agri Investor, Laguna Bay chief executive Tim McGavin declined to comment on funding but said his firm liked the prospect of moving into dairy because negative sentiment within that sector was pressuring prices.
“We’re milking around 6,500 cows on the properties now and we aim to get that number up to 10,000,” he said. “That should place us in the top-10 dairy producers in Australia.”
“I think that’s one of the most flawed policies in agriculture and it will make transactions like this much more difficult”
McGavin noted that the fund was not actively seeking further dairy acquisitions, but said “if the right opportunity comes along, we’ll do it.”
“This deal is a good example of how the right structure with the right investors can create the right outcome for all parties – we’re very happy with this investment,” McGavin added.
This meant that the acquisition of the Tasmanian dairy farms was subject to FIRB approval. McGavin described the process as “straightforward” but said future transactions of this nature would be more difficult under the 30-day advertizing regulations.
“I think that’s one of the most flawed policies in agriculture and it will make transactions like this much more difficult,” he said. “The domestic capital just isn’t here yet [to invest in Australian ag], and farmers need equity capital now to realise their ambitions.”
Laguna Bay is also trustee of Adveq Almond Trust 2 in Victoria, one of the world’s largest almond farms, which is currently up for sale.