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Australian Dairy Farms Group to sell milk with transparency of origin

Australian Dairy Farms Group (ASX:AHF) has executed a milk supply agreement with Australian Consolidated Milk Pty Ltd (ACM) to collect milk from all AHF farms with effect from January 2017.
Australian Dairy Farms Group to sell milk with transparency of origin
Australian Dairy Farms Group to sell milk with transparency of origin

AHF is an aggregator of dairy farms in Victoria with particular emphasis on the famous Dairy Golden Triangle region of South West Victoria.

ACM will commence a new supply solution from February 2017 whereby ACM will transport, test, deliver and administer the supply of AHF’s farm milk through to the Camperdown factory.

AHF had completed the acquisition of Camperdown Dairy Company Pty Ltd in April 2016.

Since the acquisition of Camperdown, AHF has been evaluating options to use their own farm milk in an effective and cost efficient way, while ensuring the best price for any surplus milk.

The new arrangement with ACM delivers the group’s aim of achieving vertical integration on a cost effective basis.

The agreement will ensure supply segregation, utilising Camperdown’s flexible milk segregation capabilities to separately process AHF’s own farm milk and other brands.

The supply arrangement with ACM is up to 30 June 2017.

AHF’s shares were last trading at $0.18, up 2.86% intraday.

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