Month-In-Review-March-2015

Month in Review
March 2015
transactions across the north – particularly with
ACE Farming entering the market for the first time
with an acquisition of four dairy farms at Cobram
East complementing a flurry of sales of medium to
large scale holdings in the northern irrigation district
totalling in excess of $25 million in transactions.
While there have been limited sales in the
horticultural space anecdotally those operating
with predominately market fruit have tended to
post strong results for the year. However there is
still considered to be an oversupply of horticultural
properties on the market. This is likely to take time
to work through as the full ramifications of reduced
quotas from the cannery several years ago continue
to work their way through the market.
Property values in the Riverina have also enjoyed
good run prices for mixed irrigation lots being
analysed out at as high as $2,200 per hectare
exclusive of water entitlements. In addition there
were several sales of larger holdings executed
including Old Cobran Station (Price on file –
Caldwell), New Market Station ($9.5 million – Hay),
Cooroonboon ($12 million), Booabula and Booabula
East Station (c$5.6 million and $8 million –
Wanganella) while the Agline aggregation was also
recently sold.
The brightest performer in the agricultural space has
been without doubt the value of water entitlements
which started the year trading at levels around
$1,325 per millilitre (incl Allocation) and finished the
year as high as $1,850 per millilitre (incl Allocation)
on the Victorian Goulburn (1A) and Murray (Zone
7). In New South Wales the story was the same,
particularly for General Security water which started
the year at around $700 to $750 per millilitre
and finished closer to $1,000 per millilitre. These
were underpinned by relatively strong prices in
the temporary market at around $130 per millilitre
leading into the end of 2014.
Southern Queensland
The winds of change are starting to move into
Southern Queensland and although large areas
especially in the west have missed out on good
breaks in the season to date, issues previously
thought adverse are now starting to work in a
positive manner. These include:
Falling Australian Dollar
A sub US$0.80 is certainly much better all-round
than +US$1. The expectations are that the Australian
dollar will continue to trend down over the next 12
months on the back of a strengthening US dollar.
Improved cattle market
This is purely supply and demand driven which has
been underpinned by restockers experiencing good
seasonal breaks. However female numbers are at an
all-time low which has created a catch 22 situation
as it will feed into higher sale yard prices and could
therefore have an impact on viability going forward.
Increased feedlot participation
Cattle numbers currently on feed are at their highest
ever recorded, equal to almost 85% of capacity
compared to the long term average of sub 60%.
There appears to be a shift from the drought
management strategy that occurred through 2012
and 2013 to one now of maintaining control of supply
at the processor end. This has led to improved
demand for product however the issue going forward
will be maintaining that level of supply given the
record low number of females within the Australian
herd.
Generally more market activity
More enquiries from potential buyers for existing
feedlots have been fielded in the past six months
than the previous six years. In this sector of the
market, three to four enquiries in the past few
Rural
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