Agriculture investment opportunities

We are fortunate that most of the farms owned by Demeter are in the higher rainfall areas of NSW. The graph below shows that although it is still dry across the state, rainfall is actually only slightly below average after the first half of the year at Temora. Of course, every region is different, and the northern area of NSW is still very dry, but the Demeter properties are by and large looking really good.

Agriculture Investment – Rainfall

Agriculture Investment - Rainfall
Agriculture Investment – Rainfall

Agriculture Investment – Wheat growing on Inglebrae West

Agriculture Investment - Wheat growing on Inglebrae West
Agriculture Investment – Wheat growing on Inglebrae West

Agriculture Investment – Canola Crop growing on Somerset

Agriculture Investment - Canola Crop growing on Somerset
Agriculture Investment – Canola Crop growing on Somerset

Agriculture Investment – Outlook Farmland Investment

If history is a guide, the outlook for farmland price appreciation is upbeat. The record low interest rates will enable successful farming families to continue to grow their farmland holdings. They have been a major driver of the bull market in farmland over the last few years.

The lower Australian dollar, together with a healthy demand for agricultural products, has pushed prices higher for most farm products in Australian dollar terms. This will underpin cash flow and profitability for many farmers.

The only missing piece in the puzzle of higher prices for farmland, is a bumper crop (or in local slang, a bin buster), for which good rain in the coming months is needed. Although most of our farms have received decent rainfall up to now, it is still too early to make a reliable prediction on what sort of season 2019 will be. As you all know by now, rain in the later stages of the growing season, (August to October) is usually the defining factor in determining crop yield.

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