Foreign buyers get set to sign

Overseas investors have entered the final stages of negotiations to secure two of WA’s most high-profile farming operations.

One of the deals would see five farms owned by high-profile grain grower John Nicoletti sold in a 70,000-hectare bundle.

The other involves a unrelated overseas entity purchasing Lactanz Dairy near Scott River in the South West.

The potential buyer of the Nicoletti assets is understood to favour a lease-back deal, which would see the 61-year-old continue on his farms in the eastern Wheatbelt and near Mullewa.

Selling agent CBRE received about a dozen expressions of interest in the farms, but the field quickly narrowed to a few creditable contenders.

Mr Nicoletti, who has worked closely with the ANZ Bank in an attempt to move a mountain of debt over the past two years, put his entire farming operations on the market late last year.

CBRE is also handling the long-awaited sale of Lactanz, which produces about 18 million litres of milk a year. WA’s biggest dairy farming operation had been supplying Brownes until recently. The milk is now under contract to rival processor Harvey Fresh.

Lactanz was first put on the market in 2012 for $30 million but has been in the hands of receivers Ferrier Hodgson for the past two years.

CBRE, Mr Nicoletti and Ferrier Hodgson refused to comment yesterday.

There was a fresh wave of interest in the dairy industry recently when the processing contract to supply Coles with homebrand milk was up for grabs.

It is understood Brownes, Lion and Harvey Fresh looked over Lactanz but never seriously considered a radical depart-ure from their policies of stay-ing out of farm ownership.

A condition of the Coles contract, which Lion appears to have prised away from Harvey Fresh, is that all of its milk is sourced from WA.

In the Eastern States, leading processor Murray Goulburn has encouraged European investment funds to buy dairy farms and lease them back as a way of keeping up milk supply.

Analysts believe it is a sign of things to come in other agricultural sectors as processors try to boost or maintain production to meet demand.