Thursday, July 7, 2022

MyFarm expanding to sheep and beef farms

MyFarm intends to use its farm ownership syndication model for sheep and beef farms as well as dairy farms.

It put together one sheep and beef farm syndicate in 2010, for Kaiangaroa farm east of Taihape, and during this year will offer several more.

MyFarm director Andrew Watters would not specify the locations but gave parameters for the suitable properties and regions.

They would be mainly sheep-breeding and lamb-finishing properties, with beef cattle only additional.

“They need to have a reliable pasture production base on relatively free-draining soils, reasonable contour and in a summer-wet climate,” Watters said.

“We would look to utilise all the new technologies like improved grasses, forage crops and herbs to achieve good lamb weight gains.

“As with our dairy syndicates, the quality of the equity manager is very important and so far we have identified some suitable candidates.”

Sheep farming did not have the advancement ladder utilised by younger dairy farmers, but there were good people looking for stepping stones, he said.

Suitable properties would be 6000- to 7000-sheep stock units and the likely minimum investment would be $250,000, although Craigs Investment Partners had been parcelling up smaller inputs.

The size of each syndicate would probably be smaller than the dairy farm ones, with only moderate bank borrowing, Watters said.

“The returns may not be as stellar as those obtainable in dairying but we believe these sheep farms can achieve 4% per annum returns, with potential upside for the capital base from improvements.

“They should do better than inflation,” he said.

The world supply and demand picture for sheep meat is better now than in past decades, with flocks in other exporting countries falling and the demand for protein growing, especially in Asian countries for lamb.

MyFarm intends to enter lamb supply contracts, so that it might forgo some peaks in price as well as troughs.

“While there will be a limited number of farms which will meet our criteria, we believe our planning is sound, the risks are manageable and the returns will be attractive enough for investors,” Watters said.

The aims are to maximise feed production per hectare, harvest that efficiently and maximise meat production per hectare.

MyFarm has 44 dairy farms syndicated and under management and attracted $35 million last year into four new and eight existing dairy farm syndicates.

In previous years it achieved about $44m a year and converted twice as many dairy farms.

The sheep farms would not be targeted as long-term dairy farm conversion prospects, Watters said.

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