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“Withdrawn applications” “OIO a closed shop” “Applications declined” Introduction It has become extremely difficult, some would say almost impossible, for offshore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 […]
Resilience – “the propensity of a system to retain its organizational structure and productivity following a perturbation.” For an investor in agriculture, this is a vitally important quality, as solid and consistent return streams will only be delivered by resilient systems. This is especially pertinent in a world of increasingly erratic weather patterns. This note considers the different resilience characteristics of ecologically managed vs. conventionally managed farmland. Conventional vs. Ecologically […]
Ecological science and smarter land management systems drive farmland productive and investment performance thereby creating wealth. This is the science of transforming farms from underperforming conventional orthodoxy into healthy, resilient, successful ecological systems. The value created being: healthier water ways improved biodiversity reduced GHG emissions higher value production more profitable farming systems. Given recent political announcements, the conventional orthodoxy around dairy farming in particular appears to be over. The projected […]
Farmland as an investment class demands a high level of understanding and very specific knowledge. It requires a clear appreciation of the various strengths, weaknesses and drivers of value. This enables the right allocations to be made in order to optimise investment performance. Farmland is an asset that can produce sharply divergent returns from very similar operations simply as a result of differing management strategies, and expertise. The impact on […]
Introduction Fourteen years ago in 2004 the UK government’s then Chief Scientific Advisor, Sir David King said that “Climate change is the most severe problem we are facing today”. Since that time the message from the scientific community has become increasingly consistent, urgent and clear; the more we understand about climate change the bleaker the outlook appears. Agriculture has a critical role to play in addressing climate change as it […]
