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$35million invested in dairy farm syndicates

$35million invested in dairy farm syndicates

New Zealand investment in dairy farming will step up in 2013 after attracting strong interest in 2012, says the one of the country’s largest dairy farm managers MyFarm.

MyFarm Director Andrew Watters says: “The industry is entering a positive cycle in 2013, benefitting from rising global milk prices and greater investor focus on the sector.

“The successful $525 million capital raising by Fonterra in December highlighted the attractions of dairying, but at the same time revealed the complexities of investing in the sector in New Zealand. Only by investing in dairy farms can investors benefit from rising milk prices.”

In the year to December 2012 73 New Zealanders invested a total of $35 million in four new My Farm managed dairy farm syndicates and eight established dairy syndicates. This compares with $43.9 million in 2011, when 81 New Zealanders invested into 12 new dairy farm syndicates and 2010 when 68 investors invested $44 million into 9 new syndicates.

The lower number of new dairy farm syndicates compared to 2010 and 2011 reflected falling dairy commodity prices for the first half of the year and a lower milk price for most of the year.

“This year’s group of investors made their decisions based on the long term trend for higher dairy demand, rather than the anomaly of high supply from 2011/12.”

2012 also saw the successful launch of new investor partnerships that enable eligible investors to make smaller investments in MyFarm syndicates. More than 50 eligible investors have signed up for this $20,000 minimum investment option to date.

Mr Watters says Fonterra’s mid-December announcement of a $0.25/kgMS lift in payout will be followed by more global dairy price increases and an end of season payout above the current forecast of $5.90-6.00/kg MS.

In 2012 MyFarm syndicated to a good balance of new (52%) and repeat (42%) investors and also saw some US and European investors join syndicates alongside expat New Zealand investors.
Directors of recent syndicates have included the directors of listed companies, senior executives of multinationals; award winning dairy farmers, senior dairy industry executives, medical professionals, expat fund managers and sheep and beef farmers.

Mr Watters said in 2013 MyFarm is planning to develop a secondary market to enable retail investors to participate in MyFarm syndicates.

MyFarm is currently offering investment in a Southland dairy farm, which has 23% production upside and is nestled within a cluster of MyFarm managed properties.

ENDS

About MyFarm: (http://www.myfarm.co.nz)

In five years MyFarm has grown to become one of the largest dairy farm investment managers in New Zealand, rivalling Landcorp and Dairy Holdings. It has $500m of assets under its management (44 dairy farms, milking 31,600 cows). The company’s syndicates have attracted investment from nearly 300 high-net-worth investors.

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