Are Conventionally Managed Dairy Farms at Risk of Becoming Stranded Assets? Stuck in a system that is no longer working from a regulatory, financial, environmental or operational/management point of view? In many catchments, intensive dairy farming systems are over, even if that is not being recognised by the operators (although increasingly it is). The positive is that individual assets, i.e. farms, can still be sound with the potential to be […]
Permanent Cropping – the organic economic advantage In terms of investment performance, it is hard to go past permanent crops and kiwifruit in particular. There is currently a unique set of circumstances prevailing in the kiwifruit sector that has created a window of advantage for a certified organic approach. This applies to bare-land development of gold organic kiwifruit orchards. The supply of suitable land is limited so the ability to […]
Be part of the Solution There are some investors who tell us they don’t like dairy. We believe this is connected to the ‘livestock are bad’ narrative. Whilst this is currently a popular theme, it is much like the food miles concept, i.e. lacking in scientific rigour and fundamentally flawed. Livestock are part of the solution. At least they are when you are investing in ecological, regenerative pastoral livestock systems. […]
How myth and ignorance create the opportunity for above market returns. Mispricing in the organic agri-sector creates opportunities for investors. An opportunity to capture above market returns whilst delivering improved environmental performance. Land, plants/livestock and other variables can all be mispriced relative to actual organic financial performance. The myth of organic yield and cost. A myth so powerful people will choose to go out of business rather than go organic, […]
New Zealand Update The latest dairy auction saw prices decline by 1.9%. Whole milk, which is a key price indicator for the Fonterra payout, was down 1.2%. Fonterra’s payout forecast for season 18/19 has been revised down from $7/KgMS to $6.75/KgMS. The farm-gate price for the 17/18 season now ended is $6.79/KgMS including a 10 cent dividend. New Zealand’s terms of trade rose 0.6% in the June quarter. The NZ […]
Better environmental outcomes, better production outcomes, and better financial outcomes. Sounds good doesn’t it? Not through gimmicks, gadgets or apps and not through an intensive GE crop burger (a ‘claytons’ burger) in a glyphosate jus with a side order of soil erosion, either. Start with N. Yes, one single letter. You may know it better as nitrogen. Defining Difference The primary difference between regenerative organic pastoral or permanent crop production […]
The Ecological/Generational shift in Agriculture Peak cow, polluted lagoons, lakes and rivers, increasing regulations, public sentiment and its recognition/impact at a political level; all these factors are combining to drive radical and positive change in NZ agriculture. As of right now, it may not be recognised outside a small community of people. It may not be particularly conspicuous or obvious but it is undeniably underway. Councils/regulators are increasingly compelled, required […]
“Withdrawn applications” “OIO a closed shop” “Applications declined” Introduction It has become extremely difficult, some would say almost impossible, for offshore investors to acquire farmland in NZ. It is an assertion not without evidence although to say it is impossible is an exaggeration based on our experience. The OIO process may have become tighter and tougher but is the failure to produce an acceptable application a failure of the OIO […]
New Zealand Update The latest dairy auction saw prices decline by 1.3%. Whole milk which is a key price indicator for the Fonterra payout was down 1.1%. Fonterra’s payout forecast for season 18/19 is $7/KgMS. The forecast for the 17/18 season now ended is $6.75/KgMS. New Zealand’s terms of trade fell 1.9% in the last quarter the first fall since September 2016. The NZ commodity price index rose in May […]
Setting the Scene Since the change in government in NZ late last year, the process around overseas investment has been a very hot topic. The majority of our conversations in late 2017/early 2018 started with questions concerning this. We do not have a definitive answer. What we do have, however, is a considered view. This view is based on conversations with a number of relevant people and our interpretations of […]
