The Australian dairy industry is enjoying an investment boom as some of the nation's wealthiest individuals start to invest in the industry.

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Surprisingly, it is dairy farms that are attracting the investment, rather than factories or brands.

The latest investor is billionaire Gerry Harvey, who will put up to $80 million into an intensive dairy farming operation, Coomboona Holsteins, near Shepparton in northern Victoria.

The retail magnate behind Harvey Norman joins Australia's richest person, Gina Rinehart, in backing dairy.

Mrs Rinehart is behind a plan to buy up to 5,000 hectares of dairy farms in Queensland, which will supply infant formula milk powder to China under a joint venture.

John Droppert, from Dairy Australia, said that as high profile, wealthy Australians were attracted to dairy, it built confidence in the industry.

"It certainly sends the right signals that you know it's not only overseas investment, it's not only super funds, it's a wide range of people and it's people in Australia that are seeing potential in the Australian industry and investing right through the supply chain," he said.

"Not just in factories or blending, packing and exporting things, it's actually right back down to the farm gate."

The industry could not be happier with Mr Harvey and Mrs Rinehart's investments.

President of Australian Dairy Farmers, Noel Campbell, said he expected more new players would be attracted to dairy.

"If people with such a profile are prepared to invest, then it's a bit of a 'me too, they must think it has a future'."

Mr Campbell believed the recently signed Chinese Free Trade Agreement was enticing wealthy new investors.

"The Chinese free trade agreement has given people the confidence to know that if we actually grow our milk in Australia we've got an actual market for it," he said.

"We're still going to have fluctuations year on year in milk pricing, but it will mean any growth in the industry has got a home for the product.

"Long term, it will have a significant benefit to our industry and that may be what's given people the confidence to invest."

Despite the new high profile investors, dairy farms in Australia are still largely family-owned.

According to Dairy Australia surveys, over 90 per cent of Australian dairy farms identify themselves as family-owned.

Mr Droppert said that was beginning to change.

"There will be a larger proportion of corporate-style investments," he said.

"Family farmers have traditionally done it best, but we're certainly going to be seeing more alternatives to that structure."