Agro-Ecological News - Agro-Ecological InvestmentAgro-Ecological Investment

RESEARCH: THE REGENERATIVE ADVANTAGE

LaCanne and Lundgren (2018), Regenerative agriculture: merging farming and natural resource conservation profitably. PeerJ 6:e4428; DOI 10.7717/peerj.4428 This recent scientific paper produced several fascinating findings. Highlights Regenerative farming systems provided greater ecosystem services and profitability for farmers than an input intensive model of production. Pests were 10-fold more abundant in insecticide treated fields than on insecticide-free regenerative farms Pest abundance is lower in fields that have greater insect diversity, enhanced […]

CREATING PASTORAL FARMING INVESTMENT SUCCESS

Agroecological science and knowledge based regenerative land management systems, drive pastoral farmland productive and investment performance, thereby creating wealth. This is the science of transforming farms from underperforming conventional operations, with their increasing regulatory, environmental and market risk, into healthy, resilient, successful agro-ecosystems. The value created being: healthier water ways improved biodiversity reduced GHG emissions higher value premium production greater farm resilience more profitable farming systems Given recent political announcements, […]

RESILIENCE

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 […]

The Keys to Farmland Investment

Do it Simply talking about investing in farmland delivers poor performance. It takes the actual commitment of capital to access the strengths of a consistent, resilient, demand driven, real asset. Many fall at this first step. Don’t follow the herd This is easy to say but seemingly trickier to achieve in practice. Images of a particular scene in the movie Monty Pythons Life of Brian, spring to mind. “Yes, we […]

The Agri Big Short

The Big Short is a great book and an excellent movie but what is the agriculture connection? In practice, the ability to actually short farming (other than particular commodities) doesn’t exist. If you could, intensive pastoral dairy in New Zealand has been an obvious target for about 5+ years and continues to be. The New Zealand public has an extremely negative view of intensive dairying. This is primarily as a […]

Stranded Assets

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 […]

Farmland Investment: A Few Thoughts

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 […]

Why you Need to Invest in Dairy

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. […]

Ecological Arbitrage

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, […]

NZ Update – September 2018

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 […]