Bankruptcy auction of dairy to test market in Fallon area
One of the largest dairy facilities in Fallon is up on the auction block and bidding for the property is expected to be high as dairymen and investors capitalize on the availability of a turnkey dairy facility near the dry milk plant currently under construction by Dairy Farmers of America in Fallon.
A&A Dairy, which folded in 2010 when fluid milk prices were on the floor and Fallon dairymen were hemorrhaging cash, is being sold out of bankruptcy by Sheldon Good & Company of New York. The 310-acre dairy, built in 1993 and expanded in 2003, lacks only cows and has minimum starting bid price of $2.75 million.
Located at 3550 Tarzyn Road, the site consists of commodity and dairy barns, milk parlor and tanks, milking stalls, corrals, milk cooling and refrigeration systems, generators and other dairy-related infrastructure. The milk parlor can accommodate up to 180 cows per hour twice a day. It also includes a 5,229-square-foot home and garage, along with 170 acres dedicated to irrigated alfalfa farming and another 110.6 acres for dairy farming.
“The sale presents a compelling opportunity for a dairy operator to acquire a prime commercial parcel that could serve as a turn-key dairy farm or an investment opportunity for a savvy buyer interested in developing irrigated farmland,” says John J. Cuticelli, CEO of Sheldon Good & Company. “The property affords the new buyer the opportunity to name their price and great flexibility to leverage the property’s various features and amenities.”
The $85 million DFA dry milk plant nearby is on pace for a fall opening. The plant is capable of processing 2 million pounds of milk per day, far more than Fallon dairymen can produce. But thus far, the expected increase in demand for milk hasn’t translated into increased interest by buyers for Fallon dairies or undeveloped land in Churchill County.
Cari Norcutt, broker with Berney Realty of Fallon, says she’s seen a slight increase in people scouting the area, but so far she’s had no additional land sales. Berney Realty also has had the Jernigan Dairy listed for sale for eight months at $3.2 million. The fully operational 40-acre dairy includes 800 cows, including 700 milking Holsteins.
“We do get calls occasionally and have some dairy-related businesses looking in our community, but they are just looking and just wondering what Fallon has to offer,” Norcutt says. “There are not qualified buyers searching or making offers at this time.”
Norcutt does says she expects to see a spike in demand for agricultural land in Churchill County once the DFA plant comes online, though.
Sean Montgomery, managing director for Sheldon Good & Company’s West Coast office in Los Angeles, says interested bidders can review all the compiled due diligence information as well as tour the site prior to the bid deadline.
“This s a tremendous opportunity for an investor to purchase the property in advance of the milk plant opening,” Montgomery says. “We do expect that the dairy processing plant will drive investment interest this property.”
Buyers will be inspecting A&A Dairy on Jan.25 and 26 and again on Feb. 8 and 9 by appointment. They’ll submit bids no later than Feb. 28.
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