SA Dairy Fund announces first projects

Posted on June 18, 2015

Two projects designed to help attract crucial outside investment in the State’s dairy industry are among the first to be funded by proceeds from the sale of SADA Fresh. The new South Australian Dairy Industry Fund is providing a total of almost $60,000 to four projects this year in its first round of funding.

“This is a landmark day for the State’s dairy industry and its communities,” Fund chair Dennis Mutton said before announcing the recipients at a seminar in Mount Gambier today.

“The South Australian Dairyfarmers’ Association (SADA) attracted national attention when it took the innovative step of creating its own milk label just 18 months ago. Their vision was to take the initiative and raise money that could be harnessed to create a better future for dairy farmers who were struggling to survive because of some tough seasons, increasing costs and low prices for their milk.

“Thanks to that vision and the overwhelming support of South Australian consumers, we are now in a position to finance our first projects which we believe have the potential to make a genuine difference to the industry as a whole.”

Mr Mutton said an obvious starting point for the Fund was exploring ways to make the South Australian dairy industry more attractive to global and national investors.

“We need this investment to not only expand our farms and the number of cows being milked, but to build the processing sector and open up new markets for premium products, that will in turn offer farmers more security and lead to them being paid more for their milk,” he said.

“We know there is enormous investor interest generally in the Australian dairy industry, especially given the Free Trade Agreement with China and growing consumer demand in Asia. SADA Fresh has started exporting milk to China and the Midfield Group has announced plans to open a new processing plant near Penola, but we have some work to do if we want to turn more opportunities into reality here in South Australia,” he said. “Two of the projects we are supporting will give us some of the tools we need to unlock that potential.”

In the first project, the Fund is providing $17,600 to develop a document that will give investors key information about the industry in SA and what it has to offer. It is being prepared by leading Melbourne-based dairy industry analyst and adviser Stephen Spencer, with input from the South Australian Dairyfarmers Association, Primary Industries and Regions SA (PIRSA), the Dairy Authority of SA and DairySA.

“We need something we can put on the table upfront to help secure investors’ attention – a value proposition that takes their interest to the next level. This document will give them the initial information they need to see that it is worth taking a harder look,” Mr Mutton said.

The Fund is also providing up to $3300 towards the cost of staging today’s South East Dairy Investment Seminar, which is exploring alternative sources of finance to help dairy farmers expand their operations, and to increase their appeal to potential investors. The forum is being organised by PIRSA in association with SADA and the ANZ Bank.

Another $22,000 has been awarded to a project exploring the benefits of variable rate irrigation technology, which is already used in horticulture but yet to be taken up by South Australian dairy farmers. The project is being funded because of its significant potential to reduce water and energy use and improve production, benefiting both farmers and the environment. Due to be completed by December, it is being co-funded by DairySA, the SA Research and Development Institute (SARDI) and Natural Resources South East.

The final project is an intensive three-day program designed to improve the skills and resilience of young South Australian dairy farmers so they are better able to contribute to building successful farm businesses. Organised by DairySA, the project has been given $16,500 because of its potential to develop the next generation of farmers and help secure the future viability of the dairy industry in this State.