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Media Release - December 09

Global Dairy Trade Results Good News for Investors - December 09
 
Another robust Fonterra globalDairyTrade auction today is evidence that international demand and supply has rebalanced according to MyFarm Director, Andrew Watters.
              
The average price for whole milk powder rose almost 4% at the monthly auction overnight and has increased 95% since July.
 
“Whilst we expect the effect of supply and demand to result in reduced commodity prices in late 2010 or 2011, long-run milk prices will still generate very strong margins and returns for investors,” says Watters.
 
MyFarm, which buys and manages farms on behalf of investors, has experienced strong demand growth in the past six months from investors attracted to the yield and security of a tangible dairy farm investment structured with minimal debt.
 
Andrew Watters says MyFarm syndicates are forecast to produce cash yields of 5-7% per annum, based on payouts significantly lower than the current $6.05/kgMS Fonterra milk price plus value return forecast.
 
MyFarm has this week unveiled its first ever zero-debt farm syndicate investment in response to investor demand. Traditionally syndicates are established with conservative debt levels of 30-40%. But the purchase and proposed development of this new syndicate, Murihiku Pastoral in Southland will be fully funded by investors.
 
“Investors in the current market have more conservative objectives focused on cash returns and investment security. So quality farm purchases fully funded by investor equity means earlier and higher cash returns and most importantly it means minimal risk to investors.”
 
Murihiku Pastoral is the 10th farm syndicate that MyFarm has established this year.