Ann: 4C Commentary, page-22

Highly likely but the trade-off is there is a direct correlation between high margin products to capital and operating costs as you get into more refined products (e.g. value added powders and specialised products). The least cost products are fresh and given AHF to date has had a low capital appetite they have stayed with fresh and the CEO has tried to leverage this as much as possible with Jersey milk (due to a higher kg/ms output than most other dairy cows used in the industry in Australia) and also yoghurts.

Butter and buttermilk deserve a mention as well as they are in low input cost range and are tracked as one of the staple dairy indexed products along with SMP and WMP as shown in the link below.

https://www.globaldairytrade.info/en/product-results/.

The other products they report have substantially lower volumes.

Also you may have noticed that all the bigger processors produce cheddar (cheese) and they have a range of specialised products, usually whey based as that is a by-product from the production of cheese. Besides the cheese this is high value product especially in the export markets.

AHF started out as a small farm aggregator with aspirations like ACE Farming but then it acquired CDC and this seriously changed the business model, usually this requires a serious step-up in capital and corporate structure and AHF is yet to gear itself up for this so now it stays in the mini-league and has to stick to fresh for a near proximity addressable market (i.e. developed regions of Victoria).

There are ways to grow AHF but the current team appear to have neither the will nor the way due to some internal complications they invited upon themselves and it will take a new team to unbundle that to get AHF up and going again. We all wait in anticipation.

By the way the likes of BAL and WHA have no processing capability nor dairy assets and are very asset-light but they have managed to get into a lucrative product line through smarter management for the foreesable future. AHF took the tougher but more sustainable long term position and have hit a wall so will continue to be unloved by the investment community who prefer the other two.