The Terang DemoDAIRY is set to close after the co-operative decided it would be wound up.
The research and development co-operative in western Victoria said it had exhausted all options to remain open.
However, the 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.
Over the past 18 months, 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 was becoming more challenging to operate profitably.
It has also been difficult to attract new board members as sitting members retire.
The last report for the 2016 financial year records a loss of about $142000, compared to $37000 the previous year.
The dairy farm operations recorded a loss of $119000 in 2016.
‘‘We have exhausted all possible options to ensure a long-term future for the co-operative,’’ Mr Teese said.
‘‘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 co-operative.’’
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 about three years ago 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,’’ he said.
‘‘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.’’
The National Centre for Dairy Education can continue use of part of the facility under its current lease arrangements.
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.
‘‘The time is right now to start taking action to realise the asset. To realise all the assets will take us up to six months but we’re on the road to do that.’’
Mr Teese said if shareholders approved 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.