How VDL Farms is converting three traditional dairies to organic

IN TRANSITION: VDL Farms' dairy at Woolnorth is one of three Circular Head properties undergoing conversion to organic production.

IN TRANSITION: VDL Farms' dairy at Woolnorth is one of three Circular Head properties undergoing conversion to organic production.

VDL Farms is dipping its toe into organic waters by seeking accreditation for three Circular Head dairy farms, with the process expected to take three years.

The farms – Robbins dairy at Woolnorth, Poilinna at Edith Creek and Talawa at Trowutta – are transitioning to organic operation.

This will create a commercial-scale farm business of around 1650 cows on almost 900 hectares, VDL Farms Evan Rolley said.

The business is seeking organic accreditation in both Australia and China, with plans to export premium milk to the Chinese market direct from Hobart as soon as possible.

“We are looking at organic certification under the Australian and Chinese systems. Australia has a three-year system, so it will be three years before we can look at a premium price for organic milk,” Mr Rolley said.

While waiting to iron out some supply chain and transport issues that are impacting direct export plans, VDL Farms has identified farms that have low bulk milk cell counts, or very high quality milk to supply the Chinese market.

The business is now sending around 10,000 litres of milk to China each week via Melbourne.

“We’re ramping up the volume of milk production each month. We’re working up the supply chain and ramping up to scale,” Mr Rolley said.

A tale of two organic countries

The two markets – Australian and Chinese – also have different certification processes when it comes to soil, pasture and the approach the dairies take in relation to pasture and the cows, with independent testing processes for each.

“Australian certifiers test the soil for different elements compared to the Chinese system, which has a different chemical test,” Mr Rolley said.

“They also have different approaches to supplemented feeding for the cattle’s diet. Under the Chinese system supplements are provided earlier,” he said.

VDL Farms has progressed through the first round of assessments by Australian and Chinese authorities is hopes to receive “organic farm in transition” status soon, Mr Rolley said.

If successful in its organic accreditation, VDL Farms will put Tasmania well and truly on the organic milk map, Mr Rolley said.

“The result would be double the amount of organic milk supplied in Tasmania,” Mr Rolley said.

A business case for organics

This organic conversion for three dairy farms is one part of Moon Lake Investments’ commitment to invest $100 million in VDL Farms over five years with the aim of scaling up its operations.

The three Circular Head farms are being used as a trial for replication at VDL Farms’ remaining 22 dairy farms down the track.

“We are making investments to test the commercial parameters we’re able to achieve and make a commercial return on investment for the business,” Mr Rolley said.

“Once we get the results, if we can demonstrate a return on investment that is superior to our existing return, we will look at further investment at other farms,” he said.

The milk price drop in 2016 slowed up VDL’s plans, but also made the company determined to value add to its dairy product.

“Dairy farming is hard work and heartbreaking if there’s only a meagre return. We need to introduce opportunities to get a more predictable return on investment. We are doing this to get a really good understanding of farm management and operational issues,” Mr Rolley said.

Besides looking at different soil, production and climactic conditions over time, one of the other upsides of transitioning to organic operation over three years is the ability to see how the pasture and herds cope under varying conditions.

“We began in March and selected three farms that represent VDL Farms’ holdings: a coastal location, Duck River and high altitude/basalt,” Mr Rolley said.

“We are looking at a range of different elevations, climates and production types to see if we can do it at scale.

“We need to do this across seasons and to understand how these organic farms perform,” he said. 

Making the transition from traditional to organic dairy farming involved significant investments in money and time.

“There are additional costs as we move away from chemicals to an organic approach to managing pests and we need to remove antibiotics from the cow herd and use natural remedies and treatments for conditions such as mastitis,” Mr Rolley said.

“If you’re not using nitrogen in the system there are significant changes with grasses. Grass-fed farming is at the centre of what we do, so we forego some income during the transition process.

“There are a significant set of new initiatives as part of our desire to lift quality, quantity and the types of markets,” he said.

Becoming a community-minded citizen

Another part of organic certification, particularly under Chinese accreditation, is providing natural vegetation buffers around the farm.

VDL Farms announced earlier this month it was working with Cradle Coast NRM to plant these buffers around the farms transitioning to organic operation.

“The three farms we selected already had native vegetation on two or three sides, but Chinese certification requires more so we are working with Cradle Coast NRM,” Mr Rolley said.

“[Cradle Coast NRM is] helping us with design and species matching,” he said.

VDL Farms also signalled it was looking to work in a wider capacity with Circular Head community on similar projects.

“We also foreshadowed that we would register a memorandum of understanding for a partnership to look beyond these farms at other areas where we can make environmental improvements regarding management of sustainability, efficiency and water quality,” Mr Rolley said.

These improvements include dairy farm sustainability projects.

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