The Prime Value Dairy Trusts has achieved a significant milestone in its development, surpassing 10,000 milking cows for the first time, according to Harrison Stewart, Senior Investment Analyst for Prime Dairy.
He said Prime Dairy’s herd is on track to produce in excess of 50 million litres of milk, and four million kilograms of milk solids for the year.
This milestone positions Prime Dairy as one of the country’s leading commercial dairy producers, representing approximately 0.6% of Australia’s total milk output.
Harrison Stewart says Prime Dairy has been building toward the 10 thousand milking cows milestone over several years. “Developing a herd of this size was always the goal to deliver operational efficiencies, and it has taken considerable investment to build this capacity.
“The focus now is on optimising the farms to ensure we can continue to deliver under varied farming conditions for the future”, he said.
Milk price improves for 2025/2026 Financial Year
Australian milk processors announce a minimum price on 1 June annually for the next financial year, and they tend to start carefully, Harrison said.
“Milk processors usually start with a cautiously low price because once the minimum price is established, they can’t reduce prices during the coming financial year. Hence, they want to avoid being stuck with high costs if markets soften during the season.
“The starting price in June is not indicative of what the final milk price will be during the season”, he said, as evidenced in 2024/25 when Fonterra’s opening milk price was $8.00 then increased to $8.35 during the season as market conditions improved.
Importantly, milk price increases during the year are backdated to cover all milk supplied since the start of the season.
“This means farmers are paid the higher price for the whole year. Therefore, the final price is what really matters for farmers’ income, rather than the opening price.”
Fonterra recently increased its price to a weighted farmgate average of $8.90 for the 2025/26 season, up from $8.35 for the 2024/25 season, and prices across other processors are starting to move higher ahead of the 1 July cut-off to establish a minimum price.
Fonterra anticipates an improvement to above $9.00 per kilogram milk solids (kgMS) but plans to confirm this after observing market dynamics in the initial months of the financial year.
“Prime Dairy’s focus remains on managing production costs and optimising production levels, as these are within our control. Milk price movements, while impactful, remain outside of our direct influence”, Harrison said.
Building resilience to drought
While drought risk can never be fully eliminated in any farming endeavour, there are ways to build resilience and soften potential negative impacts of drought.
Location plays a big role. The majority of Prime Dairy’s cows, about 85%, are in Tasmania, where drought conditions are relatively uncommon with annual average rainfall of 1,100mm. “Whilst our dairy land in northwest Tasmania experienced low rainfall at the start of 2025, heavy rain in May has set the stage for a good start to the next season”, Harrison said.
Southwestern Victoria, where two Prime Dairy farms, ‘Country View’ and ‘Aringa Park’, are located, has experienced recent dry conditions.
Unlike many other farms in this region that rely only on rainfall, Prime Dairy farms have irrigation systems in place that help offset the dry conditions, “This doesn’t solve all the challenges, but it puts us in a better position than most farms in southwestern Victoria”, Harrison said.
Tasmanian dairy farmland a strong performer nationally
A combination of quality and scarcity has driven Tasmanian farmland values higher over the period from 2020-2024, with Tasmanian dairy farmland among the best performing farmland in Australia.
It’s the most expensive, with Tasmania drawing the highest rural land prices in Australia, with a median price at more than $23,000 per hectare, according to Bendigo Bank’s 2024 ‘Australian Farmland Values’ report.
When considering farmland price growth based over the long term, values in Northwest Tasmania have grown at an average annual growth rate of 8.6% over a 20-year period, whereas Southwest Victoria have grown at 9.6% over the same period, according to Bendigo Bank’s report.
For investors, while the income derived from milk production is a major attraction, the capital growth in farmland may also deliver significant returns over the longer term.
Prime Dairy achieved eight Milk Quality Awards in 2024 across its Tasmanian farms, including an Australia-wide Dairy Australia Silver Award for Banksia Park.
To invest in the Prime Value Dairy Trusts please contact our Investor Relations Team at info@primevalue.com.au or call us on +61 3 9098 8088