Media Release - 30 June 08

MyFarm launches Australian Dairy Farm Investment Opportunity

Farm syndication company, MyFarm says its new Australian dairy farm investment will appeal to New Zealand investors looking for secure cash returns.

MyFarm has signed a conditional contract to buy a 386ha dairy farm and 120ha support unit in Western Victoria, Australia for NZ$13.5million. It is proposing to establish the Hines dairy partnership for investors subscribing a minimum of $500,000 by 7 August.

MyFarm Director Andrew Watters describes the property as a “very rare find”.

“With Hines we’ve got all the elements of a superb farm system; Scale, good infrastructure; 1100 cows producing more than 500kg MS/cow and very good quality management in the existing staff.”

He says dairying in the region is experiencing rapid growth due to its ideal climate, particularly the reliable annual rainfall around 700mm. The Hines Dairy Partnership has the added security of a water right for 900mega-litres, which after development will irrigate 200 Ha.

“I believe the quality of the farm, the location and the potential growth will see Hines develop into one of the best dairy farms in Victoria,” says Watters.

Average farm production in Western Victoria increased 7% in 2007 and confidence is high. Current milk price forecasts in Australia for 2008/09 are about AUS$6.50/kgMS (NZ$8.12/kg MS) and costs are similar to New Zealand. There is not the same requirement to buy dairy company shares and the capital cost of land is lower at about $22,200/ha.

 MyFarm syndication project manager, David Marshall has developed the business plan for Hines Dairy Partnership based on his experience as a partner in the successful conversion of a 700-cow dairy farm at nearby Warrnambool. He has been involved with the purchase of five other properties in the region in the previous six years.

The business plan for Hines Dairy Partnership is based on further developing the property to take advantage of the infrastructure already in place. It requires $1.2 million capital development including: construction of a feedpad; capital fertiliser; and upgrades to the irrigation system to increase pasture production.

Andrew Watters says the ability to generate cash returns of 9-10% with relatively low risk from the Hines investment is attractive when New Zealand land prices mean cash returns of 3 – 5% pa. 

“At a time when the New Zealand dairy farm market is maturing and investment opportunities slowing, the Hines Dairy Partnership offers very attractive potential cash returns of 9-10% and a conservative overall return of 13% per annum.”

He says MyFarm is continually appraising quality investment opportunities in New Zealand and Australia. It has syndicated eight farms across New Zealand in the previous ten months, with a total investment value of $90million.