ADF to go organic and move into infant formula

Australian Dairy Farms (ADF) has announced a bold plan to convert its six Victorian farms to organic production and move into organic branded infant formula.

The vertically integrated dairy company says it has completed applications for conversion to organic milk production on all of its 3,600 acres, which it says will see it become the largest single-owned entity in organic dairy farming in Australia, based on today’s market.

The company's six farms are located in south-west Victoria, and it also owns the processing assets of the Camperdown Dairy Company, which it bought two years ago for $11 million from the recently collapsed Aussie Farmers Direct.

ADF currently produces bottled milk, yoghurt and butter, but will add infant formula to the mix with the construction of a new processing and drying facility on industrial land on the outskirts of Camperdown.

The company said the move to organic infant formula aimed to counter declining wholesale and retail non-organic milk prices, with demand for organic products outstripping supply in Australia and globally. The company also recently ceased production of bottled milk production for its former owner, Aussie Farmers Direct.

“This is a high value-added market with major barriers to entry and sparse competition,” ADF CEO Peter Skene said.

“The initiatives are a first significant step in making the company a major player in producing and distributing organic premium-quality branded food products.

“While a vertically integrated and efficient producer currently, the company has a modest market share in the conventional milk market. The board believes the company’s best prospects lie with moving up the value chain to be a highly profitable manufacturer of these speciality products,” Skene said.