The “incredibly high” prices of New Zealand dairy farms have prompted Aquila Capital to switch its investment drive to Australia, where the dairy sector offers “the best risk-adjusted returns in global agriculture”.
The alterative asset manager, which in all sectors has assets approaching $10bn, said it was in agriculture keeping dairy as its priority investment area, citing the support to the market from strong growth in Asian consumption.
“[This] might lead to a potential demand overhang for dairy products of as much as 5bn litres by 2020,” said Detlef Schoen, head of farm investments at German-based Aquila, citing analysis of OECD data. . . .
I was most interested in the comments by Aquila on Agrimoney.com comparing returns from Australian and New Zealand dairy farms.
Aquila made some interesting points in favour of Australia. However, I believe that New Zealand remains the better target for investment.
Land price comparatives
Land prices – whether one country’s land prices are higher or lower than another country’s is neither here nor there. It is the current and expected long term sustainable economic returns that matter and on this basis New Zealand dairy land prices quite justifiably need to be higher than Australia’s. . . .
Environmental pressure threat to pasture farming – Gerry Eckhoff :
The publication of passionate articles extolling the virtues of a given system or company needs to be tempered with a dose of reality.
One such article was by Leonie Guiney, under the headline “We abandon pasture farming at our peril – returning farmer” (FW, February 24).
I would agree with the sentiment expressed, but the real reason for the move to herd homes and/or the emotive factory farming of dairy cows – environmental pressure – was not even mentioned by Ms Guiney.
One of the major causes is so well known but is almost impossible to fix.
That is the urine patch, which deposits the equivalent of 1000 kilograms a hectare. . .
Export lamb prices offset fall in volume – Alan Williams:
Higher export lamb values have more than offset a fall in volume in the first half of the trading year, with prices continuing to rise.
The average value per tonne of product rose 14% over the six months to March 31, compared with a near 9% lift in the first three months ended December 31, Beef + Lamb New Zealand data show.
Mutton average values also rose 14% over the period, building on a 5% lift in the first three months.
“What we’re seeing is an increase in value, growing faster as time went on,” B+LNZ chief economist Andrew Burtt said.
Despite the relatively high NZ dollar, the “macro” economic environment was favourable and the outlook for prices still strong, he said. . . .
No confidence vote for straw in dairy cows – Sue O’Dowd:
Dairy farmers who add straw to their cows’ diet would be better off taking up yachting, says a rumen specialist.
Lincoln University expert Jim Gibbs spoke to about 100 farmers at DairyNZ’s FeedRight roadshow at the Westpac Taranaki Agricultural Research Station (WTARS) at Hawera last week.
Gibbs said adding straw to a pasture-based diet was a waste of money. Not one study showed an increase in milk production when straw was added.
“You’re replacing something that has an ME (metabolisable energy) of 12 with one that has an ME of 6 or 8. You’ll see either a loss of production or no change. . .
North Island-wide facial eczema warning – Gerald Piddock:
North Island farmers have been warned to check their stock for signs of facial eczema following a sharp jump in spore numbers from the fungus that causes this disease among livestock.
The disease is caused by spores from the fungus Pithomyces chartarum, which live in pasture and produce a spore containing a toxin that causes liver and bile-duct damage to livestock when eaten.
The high spore counts were the result of high soil temperatures and recent wet weather, AsureQuality facial eczema monitoring co-ordinator Leo Cooney said.
”There is a combination there that is a recipe for disaster.” . . .
Love transcends language bar – Charlotte Squire:
A Mongolian and Kiwi couple living in Golden Bay have literally created their own love language.
Golden Bay born Zoe Leetch met her future husband Enkhnasan Chuluunbaatar in 2008 on a Mongolian goldmine on the northern edge of the Gobi Desert. The pair, who then worked together on the mine, taught each other English and Mongolian, and eventually created their own unique language blend of the two languages.
These days they live in Golden Bay with their young son Tushinbayar Enkhnasan. Enkhnasan, who is known as Nasa, is now a busy sheep shearer, who came second in the intermediate section of the Golden Bay A&P Show sheep shearing champs. It took some time for Nasa, who grew up in a family of nomadic herders, to become a Kiwi sheep shearer. . .