Warakirri targets $500m-plus for new dairy farmland fund

Dairy farms in both Australia and New Zealand in the gun for a major agricultural asset manager wanting to expand further.

Warakirri is planning to raise over half a billion dollars to acquire and operate dairy farmland across both Australian and New Zealand. Picture: File (Nicole Cleary)

Australian agricultural asset manager Warakirri has announced it is targeting a $500m-plus expansion into the dairy farming sector via a new trans-Tasman investment fund.

Warakirri Asset Management’s new dairies strategy is planning to raise over half a billion dollars to acquire and operate dairy farmland across both Australian and New Zealand.

Initially, Warakirri is looking to raise $150m in capital to use alongside some debt to start the portfolio.

The strategy is aiming to deliver risk-adjusted returns of more than 10 per cent per annum by investing in a diversified portfolio of investment grade dairy farming and infrastructure assets.

When asked by The Weekly Times if any seed assets had been acquired already, Warakirri declined to comment.

The new strategy will be led by Ben James, the current Aurora Dairies chief executive, a business of Canada’s PSP Investments, which has been managed by Warakirri since 2019.

Aurora Dairies owns 57 farms across Australia and New Zealand, becoming the largest producer of milk in Australia at present.

“Dairy is the third largest food source by volume globally and not only is total milk consumption growing, but per capita consumption is growing with around 15 per cent of all new food consumption via dairy products,” Mr James said.

Aurora Dairies CEO Ben James.

“Growing demand and shrinking production has supported milk price growth over the long term which has outpaced inflation, and which is expected to be supported by widening milk supply gaps.”

Warakirri managing director Jim McKay said: “We believe significant long term investment opportunities continue to exist in the dairy industry and have seen a constant increase in demand for milk and dairy products both domestically and in the Asia Pacific region.

“There is a global supply deficit in milk looking out to 2030 and beyond of approximately 20 million tonnes of liquid milk supply, which is approximately a 17 per cent deficit to total demand.

“This strategy reflects our high conviction that the dairy industry has a compelling structural imbalance that underpins long term return on investment.”

Established in 1993, Warakirri Asset Management has a cropping vehicle that operates across 11 aggregations in NSW, Queensland, Victoria and Western Australia totalling about 155,000ha.

It also operates the Warakirri Farmland Fund, which owns high-density stone fruit orchards in the Goulburn Valley and northern Victoria, plus the Warakirri Diversified Agriculture Fund, which recently exceeded $150m in value following the purchase of a 160ha orchard in the NSW Riverina for $15m.