EVERY sector of Australian agriculture has a strong outlook, with unprecedented demand driving confidence throughout the industry.
Shane McIntyre, the head of rural and agribusiness at Colliers International, said rarely had there been a time where all of the agriculture sectors and commodities had experienced strong demand.
“This is underpinned by low interest rates, positive seasonal outlook, strong commodity prices, the prospect of La Nina seasonal influence, short supply of property on the market and global respect for Australian primary produce,” Mr McIntyre said.
“Prime investment opportunities will be found in those enterprises that are versatile in nature and possess multiple income sources which are highly sought after, like cereal cropping, fat lamb and beef.
“Rural properties geared towards beef production will continue to be in high demand due to the current low Australian beef herd numbers and it is likely that the supply/demand tension will continue for at least the medium term.
“Cotton and fat lamb production returns have been extraordinary and that trend looks like it is going to continue.
“Wool has had an outstanding recovery with a finer end of the market seeing a massive increase in returns with growers receiving more than $2000/bale, as indicated by the Australian Wool Network.
“Demand for Australian wine has continued to grow with the weaker Australian dollar and trade agreements with China contributing to strong recovery in sales to export markets. Total value of the 2016 crush rose 21 per cent; and average wine grape prices increased overall by 14pc - the highest since 2009.
“Cropping land values have increased at unprecedented rates over the last half decade, having improved by up to 30pc in parts of southern Australia and between 10-20pc in northern areas, of more marginal rainfall.
“Given the strong likelihood of a continuation of La Nina climate conditions, it is reasonable to assume an average or above average crop yields for the 2017-18 winter harvest. Current forecasts are suggesting a 2.4pc increase in production of wheat for the coming season.
“The dairy sector has been challenged by low farm gate prices and high production costs for farmers. But there is an expectancy that farm gate prices will increase over the coming 12 months which will stabilise the returns in the sector.”
Mr McIntyre said in New Zealand, dairy and milk processing provided the greatest level of offshore investment with China accounting for the majority of the activity.
“The rest of the market remains cautiously confident after property prices continued to increase last year, despite the lower annual sales turnover and a relatively challenging year at the dairy farm gate,” he said.
