Thursday, July 7, 2022

Strong interest in syndicates

New Zealand investment in dairy farming will step up in 2013 according to MyFarm, one of the country’s largest dairy farm managers.

“The industry is entering a positive cycle in 2013, benefitting from rising global milk prices and greater investor focus on the sector,” MyFarm director Andrew Watters said.

“The successful $525 million capital raising by Fonterra in December highlighted the attractions of dairying, but at the same time revealed the complexities of investing in the sector in New Zealand.”

In the year to December 2012 a total of 73 New Zealanders invested $35 million in four new MyFarm-managed dairy farm syndicates and eight established dairy syndicates.

This was down on 2011, when 81 New Zealanders invested $43.9m into 12 new syndicates, and on 2010, when 68 people invested $44m into nine new syndicates.

Watters said the lower number of new dairy farm syndicates in 2012 reflected falling dairy commodity prices for the first half of the year and a lower milk price for most of the year.

“This year’s group of investors made their decisions based on the long-term trend for higher dairy demand, rather than the anomaly of high supply from 2011/12,” he said.

In 2013 MyFarm is planning to develop a secondary market to enable retail investors to participate in MyFarm syndicates and expand from its traditional dairy farming base into sheep and beef syndications.

“MyFarm Sheep will be focused on simple lamb breeding and finishing systems, backed up by long-term minimum-price supply contracts.”

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