Disagreement over investment led to mass Moon Lake walk out

INVESTMENT WOES: VDL Farms' Woolnorth dairy, one of the dairies where directors were pushing for further investment.
INVESTMENT WOES: VDL Farms' Woolnorth dairy, one of the dairies where directors were pushing for further investment.

Investment in farm infrastructure has been revealed as one of the triggers that led to the mass resignation of Moon Lake and VDL Farms executives this week.

Circular Head dairy consultant Andrew Wright said while he could not comment specifically on investment at VDL Farms, irrigation was an important factor for dairy farming in Tasmania.

“Drought proofing a farm will depend on the available water and the cost of delivering that water to grow feed, or for pasture and crops,” Mr Wright said.

“If irrigation … stacks up to be economic ... it has to be a no-brainer to be installing it,” he said.

Mr Wright asked if “the board and the CEO were so keen to see investment on irrigation, why didn’t the owner do it?”

Montagu dairy farmer Dave Field, whose farm is around 20 kilometres from VDL’s Woolnorth dairy, said irrigation proved profitable for his property. 

“Irrigation is a huge game changer. It’s about the amount of pasture you can grow and the quality; it gives you more control,” he said.

“It can get very wet and very dry here. If you have good drainage and good irrigation it helps. Good infrastructure and keeping it simple works.”

Independent Denison MHR Andrew Wilkie said it was no wonder the Australian board members had resigned under the circumstances.

“Regrettably, but unsurprisingly, all the miraculous promises are unravelling about the selling of VDL to the Chinese. For example the big investment in new infrastructure, and presumably environmental improvements, is not being realised and lots of new jobs are not being created” Mr Wilkie said.

A Moon Lake spokesman rejected claims the business had not invested appropriately.

“The company’s record since buying the property has been to maintain all jobs despite the collapse of milk prices in 2016-17 and severe drought conditions which affected milk production during 2017,” the spokesman said.

“The company has plans for other significant investment which it expects to announce in the coming year,” he said.