DemoDAIRY at Terang will start the process of winding up the cooperative after exhausting all options to remain open.
However, the Terang-based co-operative hopes to leave a lasting legacy for the south-west Victorian dairy industry by directing remaining funds into ongoing support to regional dairy education, extension, and promotion activities.
The DemoDAIRY Board has voted to start the process of winding up the co-operative, which will take several months to meet regulatory requirements.
Chairman Ian Teese said the decision to close the co-operative was disappointing but unavoidable after assessing the best way forward while trying to remain financially viable and contributing to the south-west dairy industry.
Since 2015, there have been extensive consultations with shareholders and industry stakeholders on the future of the DemoDAIRY facilities and dairy farm.
The issues were raised at the last two annual meetings which had limited shareholder attendance.
The Board has concluded that DemoDAIRY is no longer a high priority for regional dairy industry organisations and dairy farmers, and is becoming more challenging to operate profitably.
It has also been difficult to attract new Board members as sitting members retire.
“We have exhausted all possible options to ensure a long-term future for the Cooperative. We’re reducing the farmer and industry equity in the co-operative and have made the decision to start the process to wind up the DemoDAIRY Cooperative,” he said.
DemoDAIRY was established 20 years ago as an applied research and demonstration farm, but its role in the dairy industry has changed substantially in recent years as on-farm research projects were phased down, and demonstration activities were largely replaced by focus farms.
Mr Teese said DemoDAIRY had been unable to find a long-term anchor tenant for the dairy precinct, vacated in 2014 by WestVic Dairy, to support the National Centre for Dairy Education as a precinct tenant.
“A major anchor tenant is essential to the visibility and viability of the precinct and to contribute to the ongoing building maintenance costs. We canvassed both within the industry at farmer and organisational level, and potential external users, but discussions with large industry organisations have been exhausted without a positive outcome,” he said.
The National Centre for Dairy Education will be able to continue use part of the facility under its current lease arrangements.
The Board is winding up the employed labour based dairy production business.
This will provide time and resources to bring the farm up to top condition and could include agistment of dairy heifers to support local farmers.
Mr Teese said the decision to start the process to wind-up the co-operative had been made but shareholders would have the final vote on approving the change after special shareholder meetings to update and inform members.
“We are seeking legal advice regarding what is required by the Registrar of Cooperatives and the formal legislative requirements that are needed to close a cooperative,” he said.
“We are timing the decisions based on critical dates for the farming in the area and to maximize the value of land and buildings.
“The time is right now to start taking action to realise the assets,” he said.
“To realise all the assets will take us up to six months but we’re on the road to do that.”
Mr Teese said that if shareholders approve closing the co-operative, the assets would be realised, and the remaining equity used as a resource for the dairy industry in south-west Victoria.
The Board would suggest alternative approaches to manage and target these funds to the special shareholder meeting.
Details of DemoDAIRY shareholder meetings as part of the cooperative winding-up process will be announced at a later date.