Spring is always a popular time to market rural property, but this spring is so much better than just about any other, says CBRE's agribusiness's managing director David Goodfellow
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He said this was the second consecutive year many key grain growing regions on the eastern seaboard were set to, hopefully, produce above average yields.
"Conveniently, we also have a world grain deficit situation arising due to the drought in North America and Russia, as well as grain quality issues with the harvest that's currently underway in Europe," Mr Goodfellow said.
"This is potentially creating the perfect outcome for Australian grain growers, where they have high yield potential and high grain prices at the same time."
"Livestock prices have also reached new levels this year with the Eastern Young Cattle Indicator and restocker lamb indicator both breaking 1000 cents last month as the national herd and flock continues to rebuild and grass remains in abundance."
The outlook for horticulture and dairy also looked bright, according to associate director Boo Harvey, who recently joined the CBRE team.
Many southern NSW irrigators were gearing up for large summer cropping programs this year, particularly to grow rice and cotton as water was plentiful and gross margins for both these crops are looking very positive again this year.
"Probably the only commodity not doing brilliantly at the moment is wool, but this is, to a degree, being offset through strong restocker prices," Ms Harvey said.
Another trend noted by fellow associate director James Auty involved farmers upgrading their farm machinery and equipment to build labour efficiencies into their businesses and partly to offset tax.
"To justify having equipment such as a header or spray rig that might be worth half a million dollars or modern livestock handling equipment, farmers obviously need scale," he said.
"Equity levels in agribusiness properties have, in most cases, strengthened as balance sheets are updated with current land and commodity prices."
Record low interest rates and the view that agriculture was a safer lending proposition were helping underpin unprecedented buyer demand.
Ms Harvey said while many observers had predicted farmers would see this as an ideal time to "get out", the reverse was happening in many cases.
"While we have never seen a better time to sell, the trend we are currently seeing is nearly the reverse," she said.
"In many cases, families are not so much thinking 'let's sell and everyone can get their share', but 'let's get bigger' for greater economies of scale and to acquire more land for future generations."
An obvious and growing trend of young people wanting to make their career in agriculture was also encouraging - and quite different to the situation 10 years ago.
Mr Auty said the corporate sector was also active.
Rural property was viewed not only as a good portfolio performer, but also as a safe place to invest, with returns not correlated to those from other major asset classes in addition to being created from both operating cash flow and capital growth, particularly from land development.
"However, it can't be forgotten that agriculture is no different to any other industry in that we have booms and busts - everything has a cycle," he said.
"Only time will tell how long this boom cycle lasts for, however, we do know we have never seen it better certainly in our lifetime, or our parents' lifetime for that matter."
Mr Goodfellow said the COVID-19 pandemic presented obvious challenges to marketers and potential buyers, particularly for interstate travellers hoping to inspect property.
"However, we have been able to complete Shenhua Watermark Aggregation inspections by travelling in separate vehicles, with people in each vehicle speaking to each other via Bluetooth," he said.
"We haven't found following the strict social distancing rules to be a problem, with buyers still able to complete all their necessary due diligence to confidently submit their offers."
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