Alterra backs Brownes dairy sale to Chinese

Dairy industry player and carbon plantation manager Alterra has thrown its weight behind the sale of WA’s iconic Brownes Dairy to China’s Shanghai Ground Food Tech.

In a market update on Thursday, Alterra described the sale of the 130-year-old Brownes Dairy to the Chinese firm as a potential driver of expansion for the WA dairy industry after a period of sluggish growth and domestic oversupply.

One likely benefit from the sale, Alterra said, was a shift in focus for the famous dairy from domestic to international markets, with the new Shanghai-based owner unlikely to restrict itself to just the WA market once taking over.

In an update to the market this week, Alterra management said , ….under the previous ownership Brownes, like other WA major processors, had a domestic market focus treating international markets as outlets for any relatively small seasonal supply surpluses.”

“This approach meant that, while the production side of the industry has undergone significant restructuring over the last 15 years, there has been very little growth in the WA dairy industry.”

Alterra’s comments come as it continues to progress its feasibility study for a potentially game-changing style of dairy farm in W.A known as System 5.

The company is investigating the building of a System 5 dairy at its property known as “Dambadgee Springs”, about 200 kilometres north of Perth.

System 5 dairy farming, which is common in the US but has not yet made it to W.A, works on the theory that cows produce significantly more milk when they are made comfortable, and not exposed to the elements.

It involves providing climate controlled barns for the cows that affords them some respite from the elements and enables them to be walked shorter distances every day to be milked.

The ASX junior has previously predicted big production benefits from the novel method, saying System 5 could lift the average milk production per cow from 6400 litres to around 10,000 litres per year.

Dambadjie Springs - previously part of the iconic “Yathroo” property – is located in prime dairy country and receives around 600 millimetres of rainfall each year, making it ideal for growing stock feed, which is delivered to the cows at a System 5 dairy.

Alterra, WA’s newest dairy market player, is currently engaging with local processors and international parties to secure a milk off-take agreement in order to further advance its plan.

In the market update the company said,  “The Brownes ownership change is likely to be the beginning of a renewed and significant expansion of the WA dairy industry.”