Real Estate
32 THE NZ FARMERS WEEKLY – farmersweekly.co.nz – June 1, 2020
Van Leeuwens are stepping back Annette Scott annette.scott@globalhq.co.nz
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HREE years on from being the first hit with Mycoplasma bovis Aad and Wilma van Leeuwen have decided it is time to take a step back. The van Leeuwen Dairy Group (VLDG) has put nine of its 16 farms on the market as its founders plan a shift in their dairy farming focus. “Along with a capital restructure we recently finalised a new vision for the business, which is primarily focused on optimising and growing our robotic barn farm operations,” Aad van Leeuwen said. That was a plan long before M bovis struck the large-scale dairy farming operation in South Canterbury. “We were looking at selling farms before bovis but then there was the dairy downturn then bovis. The timing wasn’t right,” van Leeuwen said. “Now we want to step back, now’s the time for us.” The VLDG’s vision is to optimise its existing hybrid barn and robotic barn farming operations as well as invest in growth. Van Leeuwen believes barns are the way of the future for dairy farming in New Zealand given the ever-increasing environmental regulations. “Our aim is to be a market leader in farming systems that are sustainable with new environmental regulations ensuring the business is well positioned to capitalise on future dairy profitability due to growing scarcity of supply. “It’s very good timing at the moment to see if people are keen to invest in the VLDG and help our
STEPPING BACK: Aad and Wilma van Leeuwen have decided it is time to take a step back and refocus their future in dairy farming. Photo: Annette Scott
I don’t believe they will ever eradicate it but they have given it a damn good hiding and done a lot of severe social damage along the way. Aad van Leeuwen Farmer next generation of farming.” The van Leeuwens farmed in Waikato before moving to South Canterbury in 1993 where they have concentrated their dairy farming operations over the past 37 years.
“We have grown our business substantially over the years and are now looking to pass this legacy on to the next generation.” The nine farms for sale include six dairy farms and three complementary drystock support farms used for grazing bulls, heifers and wintering cows. The portfolio comprises 3500 hectares of land, extensive infrastructure, irrigation shares and a supply contract to Oceania Dairy. There has been a mix of management across the farms including sharemilkers, contract milkers and direct farm management. Prospective buyers have the option to own and operate the farms outright or buy the farms as a passive investment with
external operation via a long-term leaseback. “This is an incredibly rare opportunity to secure a profitable dairy farming operation of scale,” Colliers International national rural and agribusiness director Ruth Hodges said. The net yield on investment has been independently forecast at up to 7.3% on an owner-operator basis and 4.24% on a passive leaseback basis. “The strength of these returns and the sheer scale of the portfolio add up to a truly unique offering for the NZ market. “The long-term outlook for dairy proteins is very strong. NZ’s production is not increasing, meaning supply in the future will remain tight and prices firm,” Hodges said.
The farms have been operated under a traditional pasturefocused seasonal supply with the top production of the six reaching 2,058,000kg of milksolids with potential to reach further, van Leeuwen said. The VLDG has invested heavily in eradicating M bovis from all its farms since the outbreak in July 2017 with all nine farms having been cleared of the disease for more than 18 months. But while the farms have been cleared the van Leeuwen’s compensation battle with the Ministry for Primary Industries goes on. “The bovis impact hit hard. The battle has been long and ongoing and extremely stressful and MPI still owes us in excess of $10 million. “A portion of that figure has been to the High Court now and we’re confident MPI will come back to the table in the next couple of months to sort it out,” van Leeuwen said. And eradication of the disease from NZ? “I always said and I maintain to eradicate this disease they will have to find the very last cow in this country. How are they going to do that? “This disease can lay dormant and undetected in animals which can be sold and traded around the country and then after a while rear its ugly head again. “This is the reason the rest of the world lives with it and allows the farmers to manage it. “I don’t believe they will ever eradicate it but they have given it a damn good hiding and done a lot of severe social damage along the way. “Is it worth it? I don’t think so,” van Leeuwen said.
Stress pockets in agricultural lending Some businesses will come under stress Firm balance sheet and debt servicing vulnerability 50 40
%
%
Equity to assets Interest coverage ratio (RHS)
12 10 8
30
6
20
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worsened somewhat,” the Reserve Bank said. Dairy prices in New Zealand dollar terms have fallen by about 8% since January while milk price futures for the 2021 season have fallen to about $6/kg milksolids. That is still above the low prices of the 2015 dairy downturn when
All industries (ex. financial services)
Dairy
Accommodation
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Retail trade
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Construction
10 Food and beverage services
AGRICULTURE has fared relatively well during the covid-19 pandemic but vulnerabilities in the sector remain, the Reserve Bank says. In its Financial Stability Report for May it said lending to the agricultural sector is a key concentration of risk for the banking system, accounting for about 13% of loans, of which around two-thirds is to dairy farming. “The industry is vulnerable to income shocks given its dependence on global commodity prices and pockets of dairy lending have yet to recover from the 2015 downturn. “Low serviceability metrics indicate the agricultural sector has entered this crisis with a limited ability to take on more debt to absorb temporary falls in income.” Northland, Auckland, north Waikato and Hawke’s Bay have also faced persistent drought
since December, creating further stresses. “Some highly indebted dairy farms could face solvency and liquidity pressures were milk prices to fall materially.” In a published chart of balance sheet and debt-servicing vulnerabilities, the dairy farming industry has the lowest interest coverage ratio, about 2%, and a low equity-to-assets ratio, about 35%. The interest coverage ratio is calculated as the total income less total expenses divided by the interest, using industry aggregate values. Before the covid-19 outbreak became a pandemic commodity prices for the agricultural sector were stable, allowing it to avoid much of the initial economic impacts. Businesses in the primary sector were also generally able to operate under alert levels three and four, unlike many sectors of the economy. “However, the outlook has
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Hugh Stringleman hugh.stringleman@globalhq.co.nz
the payout including dividend for farmers fell below $5/kg. “However, there remains a tail of highly indebted dairy farmers from that downturn who generally require payouts above $6 to break even and these could face significant stress if commodity prices continue to fall.”
Non-performing loans in the agriculture sector were 2% in March, a small increase on their numbers in March 2018 but below the 3% levels of 2010 and 2012. The dairy industry contains most of them, many of which became highly stressed during the downturn in 2015 and 2016 and whose long-term viability remains uncertain without substantial restructuring of their balance sheets. Forestry and some other pockets of the primary sector are also vulnerable given the trade disruptions that have happened and possible export price falls, ANZ senior economist Liz Kendall said. The financial system is sound and resilient to all but the most severe scenarios, Reserve Bank governor Adrian Orr said. “Banks have good capital and liquidity buffers and need to use these to support customers and contribute to the economic recovery.”
FARMERS WEEKLY – June 1, 2020
Real Estate
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Cambridge 352 Grice Road Kingsclere agistment farm The quality of this 18.7ha property is evident as you drive in the gates and meander along through an umbrella of established specimen trees. With a backdrop of hills and with views out to Mt Kakepuku and Mt Pirongia, the award winning home is set in a beautifully manicured garden leading to a peaceful bush walk overlooking gently rolling farmland and a small lake. The home features four bedrooms, two with ensuites, three car garaging and is cleverly positioned to capture all day sun. Built with careful thought and planning this lovely 362sqm home is an elegant mix of block walls, stylish gas fireplaces, subtle timber features and beautifully appointed bathrooms.
bayleys.co.nz/2311266
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For Sale by Deadline Private Treaty (unless sold prior)
4pm, Tue 23 Jun 2020 Lakewood Block C, Unit 1, 36 Lake Street, Cambridge View by appointment Alistair Scown 027 494 1848 alistair.scown@bayleys.co.nz SUCCESS REALTY LIMITED, BAYLEYS, LICENSED UNDER THE REA ACT 2008
RURAL rural@pb.co.nz 0800 FOR LAND
Property Brokers Limited Licensed under the Real Estate Agents Act 2008
Bellmack Farm - 469 ha
TENDER WEB ID PR75495
DANNEVIRKE Fairbrother, Baker and Kumeti Roads Three separate properties which has been run in conjunction for more than 50 years in a renowned summersafe environment which is located minutes from Dannevirke township. All three properties which share common boundaries feature favourable contour with flat to rolling downs rising to some steeper faces against the Ruahine Ranges. Bellmack Farm features a good level of improvements with two woolsheds, sheep yards, cattle yards and a comfortable four bedroom home completing a well sought after package.
Available individually or a combination of any, these properties are sure to cater to sheep, beef, dairy grazing or a summersafe add on to an existing business. Fairbrother - 103.3966 ha Web ID PR75496 Baker - 156.7702 ha Web ID PR75497 Kumeti - 209.0736 ha Web ID PR75395
TENDER
VIEW By Appointment TENDER closes Thursday 11th June, 2020 at 2.00pm, to be submitted to Lloyd Dodson and Pringle, C/murray@ldp.co.nz or delivered to 9 Ward Street, Dannevirke
Jared Brock
Mobile 027 449 5496 Office 06 376 4823 Home 06 376 6341 jared@pb.co.nz
John Arends
Mobile 027 444 7380 Office 06 376 4364 johna@pb.co.nz
Limestone Hills
AUCTION WEB ID TMR74374
PLEASANT POINT 320 Mt Gay Road Due to a great opportunity the vendors have decided to put this lovely 146 ha property on the market. Currently running 500 MA ewes with 80% lambs being drafted before Christmas, and between 150 - 200 dairy heifers on May to May contract. With a lovely 4 bedroom home, 3 stand woolshed plus implement shed, all weather farm lane and much more.
pb.co.nz
Don't miss this opportunity and inquire today.
VIEW By Appointment
Price plus GST (if any)
AUCTION 1.00pm, Sat 27th Jun, 2020, Property Brokers Limited, 83 Sophia Street, Timaru
AUCTION
Michael Richardson
Mobile 027 228 7027 Office 03 687 7145 Home 027 228 7027 michael@pb.co.nz
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Real Estate
FARMERS WEEKLY – June 1, 2020
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RURAL rural@pb.co.nz Office 0800 FOR LAND
Property Brokers Limited Licensed under the Real Estate Agents Act 2008
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A real change in real estate.
NEW LISTING
WEB ID FR75854 RONGOTEA 357 Taipo Road Located conveniently to Rongotea and a short drive from Palmerston North and Feilding, this 92 ha (more or less) dairy farm has the potential to be sold as one block or a combination of 3 smaller parcels (STS) of 19 or 25 hectares of bare land and 47 hectares with all of the improvements. Currently milking +/- 220 cows on a system II - III through a 14 ASHB cowshed with a 150 cow feed pad, the farm includes extensive farm buildings. A well-maintained central race, bore water and a 4 bedroom home complete the property.
DEADLINE SALE View By Appointment DEADLINE SALE closes Thursday 25th June, 2020 at 11.00am, (unless sold prior), Property Brokers Ltd, 54 Kimbolton Road, Feilding
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Mobile 027 354 5419 blair@pb.co.nz
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pb.co.nz 20 3-20 201 Re al E ies state A g e n c
223 Seifert Road
289 Valintine Road
Tauhei 223 Seifert Road & 289 Valintine Road High Input Dairy and Support New to the market we have two outstanding properties. The planning and the work has all been done now you can reap the rewards. The First is a 78ha Dairy milking platform comprising an outstanding range of infrastructure. A new feed pad and a new weeping wall effluent system have been added to the 24ASHB complete with ACRs and in shed feed system. Milking 370 Xbreed cows the farm is on target to produce a massive 184,000KGs milk solids this season.
For Sale
Price By Negotiation View: By appointment harcourts.co.nz/ML4368 & ML4369 Kevin Parry
RURAL SALES CONSULTANT
The second property just minutes down the road is a 63ha support unit. This farm has been totally reformed with cropping, new pastures drainage and fencing. Both properties have very good housing and are on good school bus routes.
M 021 244 4668 | P 07 889 8793 E kevin.parry@harcourts.co.nz www.harcourts.co.nz Kevin Deane Real Estate (Morrinsville) Ltd Licensed Agent REAA 2008
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Real Estate
FARMERS WEEKLY – June 1, 2020
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LIS TI N G
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571 HECTARES JUST OVER 20 MINUTES FROM NAPIER 57 Tangoio Settlement Road, Tangoio, Hawke’s Bay
571 hectares (STS) Tender
nzr.nz/RX2343874
On offer are two adjacent sheep and beef farms comprising of 317ha (STS) and 254ha (STS), each to be sold separately. For the new owner options are multiple; farming, forestry or potential subdivisions given the coastal views. Rarely does this scale of land so close to town come to the market. Located just a little over 20 minutes from Napier in the Tangoio District just off SH2, these two properties have been run as one enterprise and well farmed by the same family for the past 64 years. The two properties are separated by the Tangoio Settlement Road which offers good access and leads to the popular Waipatiki beach. Best described as a mix of medium to steep coastal hill country supported by well maintained improvements. With coastal location, there are vantage points and potential house sites with spectacular views out over the Bay and Napier. Stock water comprises of reticulated systems and natural water supply. The 317ha (STS) property includes two well appointed dwellings, a large woolshed/ covered yards, large implement shed and other farm buildings. Land and operational assets are solely on offer with the 254ha bareland property. Refer also web page nzr.nz/RX2344039.
Tender Closes 12pm, Thu 9 July 2020, NZR, 5 Ossian Street, Napier. Duncan McKinnon 021 241 9073 | duncan@nzr.nz Hawkes Bay Real Estate Ltd | Licensed REAA 2008
RURAL | LIFESTYLE | RESIDENTIAL
TENDER
Limestone Country • • •
• • • •
43.6 hectares (107.73 acres) of strong sheep and beef country Located on the Argyll Ridge, approx. 38km from Hastings and 22km to Waipawa A well presented three-bedroom home. Large living areas and expansive decks. Well set back on an elevated site Subdivided into five main paddocks with good stock water from troughs and a running stream Good fertiliser history Larger starter block in an area seldom traded Opportunity to expand exists here
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TENDER
Plus GST (if any) (Unless Sold By Private Treaty) Closes 4.00pm, Thursday 25 June
VIEW
By Appointment Only
We’ve got you covered with digital and print options.
Paul Harper M 027 494 4854 B 06 878 3156 E paul.harper@pggwrightson.co.nz
pggwre.co.nz/HAS32283 PGG Wrightson Real Estate Limited, licensed under REAA 2008
Looking for the complete package?
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Helping grow the country
Contact Shirley Howard phone 06 323 0760, email shirley.howard@globalhq.co.nz 2480REHP
ARGYLL, CENTRAL HAWKE'S BAY
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