CATTLE prices and sales of cattle properties have featured heavily in recent Australian media but it is the rise of the ‘underdog’ goat market that is proving to be the investors dream with low cost inputs and significant demand for the meat, leading to greater profits for producers than ever before.
Once a pest inhabiting the Western Division, producers have adapted traditional merino and cattle enterprises to goat harvesting operations, with some larger players now expanding into breeding and fattening enterprises.
Since 2011 goat prices have increased by 75 per cent resulting in a sharp rise in the demand for land in the Western Division. The goat market has been spurred on by the low Australian dollar, free trade agreements and a surge in exports.
Over the past two years, land values in the Western Division have increased considerably with the number of properties on the market at historically low levels as local producers hold onto land to pocket profits.
Colliers International has undertaken an analysis of transactions of grazing properties in the Western Division incorporating the Local Government Areas of Cobar, Bourke, Wentworth, Central Darling and the Unincorporated Region over the period from June 2011 to December 2016. During this period the rolling average land rate/ha has increased 58pc from $48/ha to $76/ha.
The majority of purchases have been from local producers expanding existing enterprises. Combined with the strength in red meat prices, buyers have been encouraged by record low interest rates and improved seasons.
The graph above shows a number of sales analysed by Colliers International against the fortnightly price of goat (sourced from Meat and Livestock Australia). In the early 2000’s land was transacting in the Western Division for under $12/ha. Analysis of the last 20 transactions that were in excess of 5000ha disclosed an average gross rate of $58/ha.
If conditions remain favourable and goat prices continue at or near current levels, we expect the limited availability for land in the Western Division to persist.
- Will Rains is an assistant valuer – agribusiness.