NZ dairy farmers creating a Trans-Tasman market

News release

New Zealand dairy farmers creating a Trans-Tasman market,
says rural property leader

Upwards of 40 New Zealand dairy farmers have purchased farms in Australia in the past 18 months. A leading national rural property authority says the sales, which have an estimated value of $170 million, are beneficial to both countries.

Max Lyver manages the international portfolio of PGG Wrightson Real Estate, which has established as a leader in the sale of dairy farms in Australia since opening its first office there in August 2006. He sees a single market emerging, dominated by New Zealand farmers, but covering the dairy industry in both countries.

“The export of dairying expertise across the Tasman is helping strengthen the industry overall. Australia is gaining kiwi capital and know-how. New Zealand farmers are taking advantage of low entry costs to move from farm management or sharemilking into ownership. Established dairy farmers and investors are capitalising on the profitability of the industry by extending their portfolio of farms across two countries,” he said

PGG Wrightson Real Estate is running a nationwide series of free seminars, entitled Farming in Australia, aiming to inform New Zealand farmers and investors about opportunities across the Tasman.

Max Lyver says interest is high, with around ten dairy farmers per month traveling to the dairying regions of Australia to assess their options.

“Australian land suitable for dairying is between a third and a half the price of equivalent land in New Zealand. Australian dairy farmers do not have to buy shares in the company they supply the way dairy farmers do here with Fonterra. That makes entry to ownership easier to achieve than on this side of the Tasman.

“As a consequence, and with the Fonterra payout forecast the way it is, we are seeing numerous New Zealand dairy farmers taking a trip to Australia, particularly Victoria where most of the dairy farms are, to assess their options to enter farm ownership or expand their productive base,” he says.

PGG Wrightson Real Estate has four offices in the main dairying areas in Victoria, as well as properties for sale in New South Wales, Tasmania and South Australia. The company’s Victoria State manager, Andrew Gilmour, will be at the seminars, along with Australian agribusiness banking specialists Roddy Brown and Melanie Smolenaars from Westpac. Tony Ashdown of PGG Wrightson Finance will also be on the platform, talking about the company’s recently launched livestock lease product, which is designed to release equity from existing farming operations.

Max Lyver says the company has also fielded interest from sheep farmers who are considering taking the plunge into dairy farming, but are nervous about the high cost of entering the sector in this country.

“With the way things have been going recently for sheep farmers, many are taking a hard look at their future. Obviously dairy has plenty going for it at the moment and entry level for a dairy farm in Australia is a lot easier to manage than the equivalent in New Zealand. It is likely that the Trans Tasman trend will expand to include sheep farmers looking at a double switch: into dairy and across the Tasman.

“Sheep farmers in that bracket will find these seminars answer many of their questions and potentially provide them with a very positive way out of their current difficulties,” he said.

According to Max Lyver, farmers considering a change of country and a change of land use will not find such a double challenge insurmountable.

“Conditions for dairy farmers in Australia are different, but adaptation is easy.

“There is a two to three month dry period over the summer and the temperature in some of the hotter areas is definitely higher than in New Zealand, but overall it is no more challenging than farming back home. There are quite a few kiwis in Australian dairying country as well, and the New Zealand attitude is usually welcome, which makes it easy to integrate for those who do move across,” he said.

ends

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