HOT off the back of Sydney’s Royal Easter Show and its associated celebration of all things agricultural comes news that life on the land is looking up: farm values are heading in the right direction in almost every Australian state even though transactions have fallen significantly.
The uplift in values gathered even more momentum earlier this year after above-average rainfall across much of the country. “From the middle of January we have seen interest return,” said LAWD senior director Danny Thomas, a leading agribusiness transaction advisor. “There is much more grass around, cropping returns were good and there is a much more favourable rain forecast into this year with the chance of another La Nina year.”
Welcome changes
This was a welcome contrast to the situation that unfolded in the latter part of 2023. Back then the market was in “a place of real negative sentiment following the BOM’s weather predictions,” Mr Thomas said. “Consequently, this had an effect on livestock markets and prices. Paired with the rapid rise in interest rates it really cruelled confidence in the later part of the year.
“There were deals that fell over, some properties didn’t reach indicated levels for prices while some sellers accepted 2021-22 levels. Others had to get creative with deals to preserve value. Institutional buyers and fund managers also pulled up worried they were going to catch a falling knife in case of a significant price correction.”
Since then, sentiment has shifted to a far more pleasant place. It’s been ushered along by a turnaround in weather, healthier cropping returns and better livestock prices plus a flurry of major transactions acting as icing on a nicely rising cake.
Big deals
The most notable deal in the past several months was the sale of the 2.9-million-hectare Kimberley Cattle Portfolio by Hong Kong-based Australian citizens the Hui family and their Archstone Investment Group. Canadian investors behind the Lawson Grains cropping empire secured the enormous land parcel, paying a reported $300 million for the stations subject to regulatory approval.
Another major transaction was clinched recently when Australian poultry pioneer David Bartter offloaded his $120 million, 26.8 hectare cropping property, Ballandry Station, in the NSW Riverina to Ararat-based Excel Farms.
And in a similarly promising sale Gilgal Station, a 3605ha holding near Cootamundra in south-western NSW, was offloaded for a reported $55 million by major seedstock producer Palgrove to a German investor, the family-backed Lukas Asset Management Land und Fortwirtschaft fund, which will continue to generate income from Gilgal’s livestock and cropping as well as carbon credits. LAWD senior director Col Medway who handled the sale said interest on the listing came from institutional investors and locals.
Remarkable turnaround
Raine & Horne has described the upswing in farmland fortunes – backed by data contained in the latest Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES) report - as “a remarkable turn of events”. Research by The Rural Bank has also signalled the arrival of relatively prosperous times for farmers, with the momentum in beef exports continuing along with the rise in cattle prices. (In February, the Eastern Young Cattle Indicator (EYCI) returned to above 670c/kg in a substantial 93% increase from its lowest point recorded in mid-October 2023.)
“The rural real estate markets in the eastern states are poised for growth fuelled by renewed confidence, strong cattle prices and solid agricultural production,” said Travis Wentriro, NSW Network Manager at Raine & Horne Rural. “Better than expected rainfall and interest stability are expected to underpin agricultural land prices this year.”