Property

National market for cropping country maintains buoyancy

Liz Wells, February 9, 2022

Muggawa at Arrino is for sale through an online bidding platform. Photo: Nutrien Harcourts WA

UNFLAGGING demand from investors and existing cropping operations looks like making 2022 another strong year for growth in the value of cropping and mixed farming properties across Australia.

While the high price of cropping inputs may have tempered some appetites for expansion, low interest rates prevail, and commodity prices remain high.

At Nutrien Harcourts WA, agent Yves Beagley said there were arguments for both a plateauing market as well as for further appreciation in 2022.

“We’ve experienced a record grain-growing season in WA, and most family-farming businesses are well positioned to make further land investments,” Mr Beagley said.

“On the other hand, high input prices and seasonal uncertainly can always hinder sustained growth in the short term.”

With a number of properties selling at auction during the opening weeks of 2022, and strong interest reported for those available through expressions-of-interest (EOI) campaigns and regular listings, the market looks unlikely to be going backwards.

Grain Central looks at one listing from each mainland state to gauge the market:

Queensland

With a bumper summer crop in the ground following a solid winter crop, the Darling and Western Downs looks to have ended its run of drought-affected seasons.

And with big appetites for grain from the region’s feedlot, poultry and piggery sectors, as well as export avenues for grain and cotton, plenty of Downs farming operations are looking to expand.

This climate means Iandale, a 723-hectare farm at Macalister, 30 kilometres west of Dalby is expected to sell under the hammer of Eastern Rural Dalby when it goes to auction on March 3 to enable the current owner to downsize.

Iandale comprises 366ha of zero-till cultivation, with the balance suited to grazing.

Country is mostly soft self-mulching black and grey cracking clays, and grazing area is principally natural blue grass plus and a recently developed 37ha of pasture.

Wilkie Creek runs through the property, which has one bore and five dams plus rainwater tanks, and improvements include a home, machinery sheds, and three 120-tonne silos.

Eastern Rural Dalby agent Roger Lyne said Iandale was likely to be most attractive to those with existing operations in the district.

The sale of Glenmore, a 302ha Macalister property sold by Elders Dalby for $14,252/ha in April last year may provide a price guide.

Iandale at Macalister is to be auctioned in March 3. Photo: Eastern Rural Dalby

New South Wales

South of Forbes in the Wirrinya district, Miller & James Real Estate is offering Tarrallie for sale through an EOI campaign, with the first stage closing March 3.

Covering 775ha, and with no internal fencing, it has run a wheat-canola rotation over the past five years.

It comes to market with a full soil-moisture profile for 2022, and is being sold by Tom Thatcher from Bathurst to allow him to semi-retire.

Miller & James managing director Angus McLaren said Tarrallie would ideally be an add-on property.

“Interest is coming from local family farmers and corporates, as well as farmers from the east,” Mr McLaren said.

Tarrallie is gently undulating with mostly red loam to grey soils, and a fertiliser program has ensured soil phosphorous levels have remained high in recent years, despite high yields.

Tarrallie is connected to the East Trigalana Water Users Group, and also has several dams.

Infrastructure includes one residence, six silos, two sheds and five water tanks.

Mr McLaren said Tarrallie is expected to make in excess of $6000/ha, and sources have said the Central West in general represents good value.

“We have a very strong listings book.

“We are completing a couple of off market transactions, and the higher prices are flushing out sellers.”

Tarrallie at Wirrinya is for sale through an EOI campaign. Photo: Miller & James

Last month, the NSW Valuer General reported the value of the state’s farmland had climbed 26 per cent in the 12 months to June 2021.

Among the more modest value increases in rural land over the 12-month period were north-west NSW on 15.5pc, and the central west on 16.2pc, while the Riverina including much of the south-west slopes posted a gain of 23.9pc.

In a statement released last month, LAWD senior director Col Medway said the long-term capital gain of NSW agricultural land had historically been 6-7pc per annum, and the recent profitability of the farm sector had given farm businesses confidence to invest in expansion.

“It is not hard to see why existing farming enterprises are chasing expansion opportunities, particularly when they are looking at the marginal analysis of the investment, whereby the increase in scale is diluting their fixed operational costs,” Mr Medway said.

“Over the past year, we’ve also seen some institutional landholders breaking up farms they had aggregated and selling these back to family businesses, which is further supporting this trend.”

“If you look at the market fundamentals of what has happened to date, I don’t see any headwinds affecting these major factors, and you would have to think the market will continue to strengthen.”

Mr Medway said the south-west slopes had proven one of the hottest markets in the state, fuelled by dual-purpose wheat and canola crops that had enjoyed two soft springs, and recovered after grazing to produce high yields selling into strong markets.

He said the spring of 2019 was the first time the south-west slopes market broke the $5000 per acre ($12,355/ha) barrier.

“Now, across the region, most of the better quality land is consistently making north of $7000 per acre ($17,230 per ha).”

Victoria

Three properties being marketed as the Laen Cropping Portfolio are up for sale by EOI or lease through Colliers and Driscoll Douglas East Rural Real Estate.

Located 11km west of Donald in the Wimmera region, they cover 1328ha, with all but 29ha deemed arable.

Average annual rainfall across the 815ha Bryans, the 355ha Adams and 159ha Burchells farms is 405 millimetres, and the farms are for sale together or separately.

Their cereal yields have averaged around 3.7 tonnes per hectare on cereals, and 2.6t/ha for pulses, with barley and lentils among the major crops.

Colliers agent James Beer said the vendor was a farming family based in Victoria’s Western Districts who wished to consolidate their asset base.

Laen Cropping Portfolio is available for sale or lease. Photo: Colliers

Wimmera agent Andrew McIllree, Driscoll, McIllree & Dickinson, said the region’s growers had had three or four average or better seasons on the trot, and confidence and an appetite for expansion had seen its best farming country hit $18,000/ha.

“If you have two or three big, goey farmers who want a place, and it’s good land that’s been farmed well, that’s when you’ll get those prices.”

“There’s a lot of confidence out there, particularly from some of the bigger players.”

“I don’t know if the market’s levelled out.”

However, some farms with lower rainfall and poorer soils, and wanting in improvements, were changing hands at around $2000/ha to mark the bottom of the market.

South Australia

Hill View is set to go to auction on March 17 to test the market for quality mixed farming country in the Port Adelaide zone.

Located 17km north of Clare, it is being offered by brothers Donald and Kym Martin through Ray White Rural SA.

The Martins bought Hill View in 2013 from the Weckert family, its owners for most of last century.

Agent Daniel Schell said a property of this size in this region rarely comes to market.

“Quite a bit turns over in the district, but it’s rare to find something of this size that’s suited to cropping, hay and livestock.”

“It’s pretty well a turnkey property – a viable proposition on its own – with good waters, fencing, shedding and infrastructure.”

Hill View in SA’s Mid North is to be auctioned on March 17. Photo: Ray White Rural SA

Ray White Rural SA sold a comparable block a short distance from Hill View in late 2020 for more than $17,000/ha, and wide-ranging interest and current market strength indicates that next month’s auction will exceed that.

“One of the differences we’re seeing is they’re not just neighbours that are interested in buying.

“They used to be within 10-15km of the property, and now they will come from a couple of hours or more away.

“However, there’s certainly some interest close by.”

Western Australia

At 1060ha and with an arable area of 743ha, the Arrino property Muggawa makes an ideal bolt-on to a larger operation.

Bought 10 years ago by the current owner, Muggawa is for sale by OPENN Negotiation through Nutrien Harcourts WA.

Bids opened January 31, and the final bidding stage commences on February 28.

Agent Yves Beagley said Muggawa was being sold to allow the owner to consolidate their holding closer to their main aggregation which is some distance away.

Muggawa is 25km south of Mingenew, and remnant vegetation in the centre of the property separates its two soil types, undulating York gum loam to the east and open sandplain and gravel loam to the west.

Up to 6t/ha of limesand has been applied to selected soil types, and the 2021 cropping program consisted of 405ha wheat, 185ha canola and 105ha lupins.

Muggawa is a short distance from the highly improved Erregulla Plains, which sold in February 2020 to Daybreak Cropping for $4399/ha, and has an annual average rainfall of around 380mm.

Mr Beagley said he was hesitant to suggest a price guide for Muggawa.

“The region has experienced significant growth in the past two years.”

Mr Beagley said Muggawa had attracted mainly local enquiry to date and some outside interest.

“There is ongoing interest from lower-rainfall areas seeking to diversify land holdings into more reliable rainfall zones.

“The property’s size means it appeals to a reasonably broad market.”

Muggawa is for sale through an online bidding platform. Photo: Nutrien Harcourts WA

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