• A $55m research project by the Victorian government aims to secure the profitability of the dairy industry. (Image source: Gettys)
    A $55m research project by the Victorian government aims to secure the profitability of the dairy industry. (Image source: Gettys)
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Australia’s largest producer of certified organic milk, Organic Dairy Farmers of Australia (ODFA), has entered voluntary administration. It is estimated it has more than $11.5 million in debts.

The co-op is 100 per cent owned by 40 family farmers, supplying milk from three main dairy regions of Victoria, central and north-west Tasmania. It provides milk for 5am Yoghurt, Lemnos and Pure Organic Milks. It also has a milk bottling factory in Geelong where it produces butter and other dairy products. The factory employs more than 20 people.  

Worrells Solvency and Forensic Accountants were appointed administrators, which has subsequently been passed to Deloitte.

Deloitte told the ABC ODFA owed National Australia Bank $8 million and unsecured creditors between $3.5-$5 million.

Worrells said voluntary administration followed a range of external pressures, particularly ODFA recruited farmers and their milk supply into the co-op as part of its vertical integration strategy.

This growth strategy had a strong focus on exports to China through key customer partnerships. The combination of a contracting Chinese market, delayed sales, and now the impact of COVID-19, saw the directors of ODFA take the prudent measure of appointing Worrells, to facilitate a structured and transparent approach, to work through the current business challenges.

The first meeting of creditors is today, 27 May.

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