» Frequently Asked Questions

Frequently Asked Questions

What is the minimum investment I can make?

Normally NZ$250,000, but this depends on the syndicate. There is often no specified minimum when considering share sales from existing dairy partnerships.

What is an ‘eligible person’?

A person is deemed to be eligible and able to invest in a MyFarm dairy partnership if they are either:

Wealthy (have net assets of at least $2 million or annual income of at least $200,000 for the last two financial years),

Experienced (either with investing money or in the industry or business to which the security relates – i.e. farming).

Why are most MyFarm investment opportunities in Canterbury and Southland dairy farms?

MyFarm investors have had good investment outcomes from other regions in New Zealand. However at present Southland and Canterbury dairy farms represent the best quality assets (in terms of scale, quality of improvements and production potential) and the best value for money. Be assured we are looking outside these areas.

How do you set the production targets in MyFarm business plans for new syndicates?

Production targets are set after consideration of a number of factors, including:

Production achieved in previous seasons on the property and on similar farms locally.
Our assessment of the productive potential of the farm defined by its soils, contour, micro-climate and our ability to source water for irrigation.
Forecast increases in production following development/more intensive management (such as better fertiliser management and re-grassing).

Who is MyFarm?

MyFarm™ is New Zealand’s leading dairy farm syndication, investment and management company. We have the most experienced rural property management team in New Zealand, with a 21 year track record in farm and agribusiness investment.

Our Directors Cliff King; Andrew Watters and Grant Rowan all work actively in the business and are experienced rural funds managers with deep links into farming, agribusiness and the rural sector. Their focus is to create quality investment opportunities into tangible assets that have a superior return/risk profile and a defined investment period.

Today we manage farms in Waikato; Lower North Island; Canterbury; with our largest presence in Southland – where we have a second office and four farm supervisors overseeing 25 dairy farms. At our Feilding head office the administration team is responsible for monthly accounts, payrolls, compliance payments and partner payments for all MyFarm managed syndicates. Our team of experienced farm supervisors are a crucial link between farm managers and investors, leaving the on-farm managers to do what they do best; farm.

How does MyFarm know that recent increases in dairy payouts won’t turn out to be another bubble like in 2007/08?

We don’t.

But we do know that over the next 10 years it is believed milk prices will be strong as a result of global demand growth of 2 – 3%. Much of the additional milk required to meet this demand will need to come from farmers with higher cost structures than NZ, underpinning the likely payout.

We reduce the risk of our investments by establishing them with low costs of operation, a low breakeven payout of below $5.00/kgMS and low debt.

If payout doesn’t meet projected levels then dividend returns would most likely be affected. In fact it is likely that payouts will be both above and below the payouts forecast reflecting the cyclical nature of the NZ dairy industry.

Isn’t farming a risky business to invest in?

Yes it can be. That is why some people prefer to invest with us, rather than perhaps go it alone. Our 21-year track record of providing and managing farm businesses combined with our farming wisdom alleviates many of the risks associated with farming.

We aim to successfully manage farms through a variety of climatic and economic conditions by focusing on quality assets with low levels of debt and then applying the farming wisdom of our experienced, quality farm managers. MyFarm managers are highly trained, experienced career farmers and some also choose to become investors in the farm business.

We believe that investing with MyFarm is an investment in the economic fundamentals of global food demand growth backed by the security of tangible and valuable physical assets such as farm land and Fonterra shares.

Why would I invest with MyFarm and not set up an equity partnership/syndicate myself?

Because MyFarm offers a fully managed, low hassle option and employs the best people to manage your investment.

We provide a formal farm management system and career farmer managers.
We identify, syndicate, improve, and manage dairy farms; it is the only thing we do.
We deliver investments that address risk as well as returns. The assets we purchase are of high quality and debt structures in our business plans are conservative.
MyFarm’s scale allows us to pass on significant cost savings to the farm businesses we manage through bulk buying. This includes a number of important farm inputs such as fertiliser, cull cows, insurance, even interest rates.
We provide an ‘experience’ through participative ownership. As an investor you can elect to become a board member and have close involvement in the governance of your business.
We provide a service to sell your shareholding, should you wish to exit early.

Can I invest in a MyFarm syndicate without a MyFarm management contract?

Yes, but as yet this has not occurred. By appointing MyFarm as the manager you are making us accountable for the business plan by which you invested. Sometimes syndicates opt to take over the management of their investment (all or mostly) after the completion of the initial 3 year MyFarm Management contract.

What do I get for my investment?

Your investment is solely into the farm business you select. You become a shareholder (or partner), and if desired, a Director of that farming business which owns the land, stock, plant and if relevant the Fonterra shares.

Your principal return is of course cash returns which should commence during or at the end of your first year’s ownership. Traditionally dairy farms have also performed well during times of inflation with asset values increasing on average by 3% above annual inflation. This should be reflected when you sell your units in the partnership or the farm is sold.

A secondary but important factor is that you should enjoy your investment; both the quality of the information that you receive and the relationships that develops.

Can I invest in more than one MyFarm syndicate?

Yes.

MyFarm dairy investments mean you can own a share of the New Zealand dairy industry for as little as $250,000. You have the flexibility to invest more than the minimum in one farm syndicate or make several investments across multiple farms.

Will I have to top up my initial investment at a later date?

No.

The investments require an initial investment only. There is no requirement for you to introduce capital at a later date. However there may be share sales or new capital development within syndicates (such as deciding after three years of ownership to buy a neighbouring block) that could allow you to increase your investment into the business if you chose, but this would be entirely your choice, and not an obligation.

How do I get out of my investment?

A MyFarm investment is a medium to long-term investment. If you need to redeem your investment in three to four years perhaps this is not the investment vehicle for you. This said even when you plan for a medium term investment there can be unforeseen circumstances that arise which mean you may be required to sell your shares.

You can realise your investment in a MyFarm dairy syndicate when either the farm business is sold or through a share sale managed by MyFarm. MyFarm dairy syndicate shares are sought after and typically sell at valuation within 2-3 months.

How often can I visit my farm investment?

As an owner of the farm business you are entitled to visit the farm. However we would ask that investors respect that these are working farms with very busy managers operating them. It is best to check (via the MyFarm supervisor) if the day and time you wish to view the farm is suitable for the on-farm manager.

MyFarm arranges one farm field day each year.

Who are the other investors? Will we get on?

MyFarm strives to match likeminded investors to each farm investment. We do this by convening a conference call meeting when the investment group is close to formation. The objective being to;

Introduce interested investors to each other
Consider any due diligence items that have arisen
Discuss the business plan
Discuss the key terms of the Partnership agreements and the acceptability of the MyFarm property management agreement.

As a MyFarm investor each shareholder is entitled to be nominated for the Farm Board and can participate in the governance of the farm keeping a close eye on their farm investment.

We like to ensure the investment is inclusive and fun for all investors. This often means organising social get togethers for investors around on farm meetings and annual general meetings.

We can’t guarantee you will like all your fellow investors, but you are all have one thing in common - the property you have invested in.

When will my investment generate a return - when will I get my first payment?

The date of the planned first payment to investors is detailed in the business plan for each investment. MyFarm generally forecasts cashflow for payments to begin 9 months following establishment. However it is the Board of Director’s decision at this point as to whether payments are made to investors or used to repay bank debt.