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 […]
Waipa Catchment, Waikato, New Zealand Contributed by Nigel Bradley of Envirostrat Consulting Ltd What is it? A study has recently been undertaken in the Upper Waipā Catchment to investigate the feasibility of impact investment approaches and the opportunities to address significant environmental challenges in the catchment whilst delivering a positive financial return on investment. The work was initiated and funded through a grant from the Waikato River Authority and Waikato […]
December 2017 New Zealand Update The latest dairy auction (December 19th) saw prices decline by 3.9%. Whole milk which is a key price indicator for the Fonterra payout was down 2.5%. Analysts have suggested that farmers should brace for an even lower Fonterra payout than the recent revised payout forecast (see below). This drop coincides with dry conditions in NZ meaning farmers are under pressure. Analysts have been expecting the […]
It is ecology and smarter land management systems that drive real farmland productive performance. The ‘slam dunk’ of such smarter management is that measurable environmental outcomes are improved – reduced N leaching, sediment and E.coli in waterways, biodiversity, GHG emissions etc. along with financial performance. No trade off, better environmental management drives better financial outcomes. Recent research undertaken here in New Zealand strongly indicates that such environmental gains can […]
Many of you will have received our recent OIO paper where we considered what changes may be brought about to the operation of the Overseas Investment Office by the new government and what that might mean for investors. Since we wrote that paper the government has issued a Ministerial Directive Letter. The letter itself highlighted what are important points to take note of. Below we identify some of what […]
