AGRICULTURAL land values are steaming ahead, with sales across the state demanding record prices. Banks are fielding inquiries from farmers looking to scale up, with nearby properties high on their wishlist.
ANZ southern Riverina and Northeast Victoria regional executive Conor Noonan reckons land values in his area are increasing by 7 per cent to 8pc and the majority of finance inquiries are from people looking to buy more land.
NAB agribusiness customer executive Neil Findlay said farmers were looking to “bolt on” neighbouring properties where it made sense.
And Rabobank Riverina regional manager Peter Evans says the rural property market is holding up, as farmers with expansion intentions continue to look for opportunities.
In the Central West Chris Stonestreet (pictured on our cover with son Rory) recently bought 405 hectares to add to his 688ha property near Barry on the Central Tablelands.
“Farrentoureen” was passed in at $3.7 million last month, but Mr Stonestreet later negotiated a sale for a greater figure, saying “they got what they were wanted, they were tough”.
The new property will be used to run Angus cows and calves.
“It was good timing for us, my son Rory was coming home and I guess, as they say, the place ticked a lot of boxes.
“It had a relatively new house, about 10 years old, mostly top quality red basalt soil and three good stock bores.
“The fencing is good and about 80 per cent of it is phalaris-based, high-quality pasture, the balance is creek country, with white loam soils,” said Mr Stonestreet, who also owns Carcoar’s Royal Hotel.
He said he would modify his business model slightly, but wouldn’t be taking on a lot more breeders, staying at about 500.
“We used to sell all our calves as weaners, now we’ll grow them out to feedlot weight and buy in a few trade cattle if the season permits.
“If it’s dry, we won’t buy the trade cattle and just look after our own,” he said.
He said one big advantage of the new property was that it was only five kilometres from his home, “Fernside”, and that meant he wouldn’t have to buy a lot of plant, such as tractors and quad bikes.
“There’s no way I would have expanded like that if my son hadn’t been coming home,” he said.
Rory, 24, has just completed a three-year farm management course at Marcus Oldham College.
The Land also understands the 160ha “Rosebank”, at Spring Terrace, is now under contract and has sold in the vicinity of $5 million.
Buying neighbouring or close proximity properties is also occurring around Griffith, where Elders’ John Dalton reckons the old adage “get bigger or get out” rings true.
Mr Dalton said it was far from doom and gloom in the western Riverina despite the season, with values for both irrigation and grazing land on the up.
“There’s a big advantage in buying your neighbour out,” he said, “you don’t have to buy a new header, it just takes longer to harvest”.
He said a couple of good years complimented by good commodity prices had resulted in strong financial positions that good operators were looking to capitalise upon.
“People have been able to put a fair bit aside in the past few years,” he said.
In the north Ray White Dorrigo’s principal John O’Leary said the last two properties that have gone to auction have set record prices.
“Wyoming” a 42.5ha (105 acres) sold at $16,000 an acre. The buyer had previously bought 81ha at $11,000 an acre and 16 years ago that property had sold at $4000 an acre, he said.
“Sunnycrest” at Deervale, an 80ha former dairy farm, settled on Tuesday at $13,500 an acre and was bought by an investment company looking to pursue horticulture.
Mr O’Leary’s rural specialist Rory Birt said a good fattening or breeding block of 979ha with a 300 megalitre water allocation was coming up for auction on December 5.
“Gangara” has nine kilometres of Little Murray and Bora Creek frontage, he said.
Rabobank’s Mr Evans said while the impact of the dry season on both profitability and general sentiment is likely to have an impact on the level of demand for land, the run of relatively good years in the lead-up to this season has seen many farmers build-up cash reserves and equity.