Tag Archives: press-releases
End Of Drought Boosts Prospects For NZ Land Prices
The ending of New Zealand’s drought has handed the country’s farmland market a “strong platform” for the important spring season, real estate professionals said, amid bright hopes for the important dairy sector too. Economic data on Thursday highlighted the impact to New Zealand agriculture from one of the worst droughts on record, with the sector seen shrinking 4.8% in the April-to-June period from the previous quarter, thanks largely to the impact on dairy farms of poor pasture conditions. “Dairy production was the biggest contributor to the fall, while sheep and cattle farming also fell,” the official statistics office in New Zealand, the top milk exporting country, said. However, country’s real estate institute, Reinz, flagged a “mood of optimism prevailing in the rural sector” now that rains have returned, with “kind weather” meaning that early spring grass growth is “the best experienced by many”. ‘Buoyant market’ “The livestock market in saleyards around the country is buoyant and a healthy barometer for the rural environment,” Reinz spokesman Brian Peacocke said. “Because of those conditions, the majority of farmers are in good spirits.” With less pressure to sell farms, “the net result across New Zealand is strong demand, particularly for quality, sensibly-priced property, and a current shortage of supply”. Rising prices New Zealand farmland prices in the June-to-August period were 10.3% higher than in the same three months of 2012, according to a Reinz index adjusting for location, size and type of properties sold. The unadjusted value of land sold in the period averaged NZ$21,676 per hectare, up 21% year on year. In dairy, the raw farmland value rose to NZ$32,234 per hectare, up 32% from the NZ$24,492 per hectare a year before, with sites sold typically of about 130 hectares. However, the biggest number of sales was of smaller, and cheaper, grazing properties, averaging 53 hectares, which also saw stronger growth in unadjusted land values, of 48% to NZ$16.744 per hectare. ‘Exacerbate supply tightness’ The resilience in dairy farm prices, despite a particular downturn in the sector’s fortunes because of drought, comes amid a resilience in world milk prices, which are being supported by firm demand at a time even as output in New Zealand and Australia is recovering. “Production in New Zealand and Australia is having a good start to the new dairy season, but is unlikely to be able to fully supply the market in the immediate future,” National Australia Bank said on Friday. While output growth in Europe and the US has also recovered from poor starts to calendar 2013, when production was held back by a cold spring and elevated feed prices, “most of the production in these regions will be directed at domestic consumption rather than exports”. NAB flagged the boost to prices from a decision by New Zealand-based Fonterra, the top dairy exporting company, to cut sales of milk through commodity channels in a shift to focusing on higher value products. “This is likely to exacerbate the supply tightness situation in the short term and keep prices high,” NAB said. “However, it is not clear how quickly the market will be able to respond to these price signals.” Continue reading
Burt County Land Prices Rise Above Average
Burt County Land Prices climb Burt County land prices reach some of the highest values in Northeast Nebraska in 2013. Posted: Sunday, September 22, 2013 6:05 pm | Updated: 6:20 pm, Sun Sep 22, 2013. Jamie Horter, Editor Lyons Mirror-Sun lmsun@abbnebraska.com The average value of farmland in Northeast Nebraska topped an average of $6,165 per acre this year, up 24% over last year according to University of Nebraska Department of Agricultural Economics. Irrigated cropland in the Northeast part of the state is valued at $8,715 per acre. Tillable pasture land stands at $3,575 per acre. Dryland crop ground (without irrigation) averaged $5,995 per acre. In Burt County, land is trending higher than the average for Northeast Nebraska. Recent sale bills from selected Burt County auctions are outlined in the table. Land prices have increased 126% over the past five years in Northeast Nebraska. The University of Nebraska has reported that three factors have played a heavy influence on the increase in land prices. Crop prices have played the greatest influence. Additionally, post-drought price spikes in grain markets in 2012 resulted in land price boosts up through the beginning of 2013. Active farm buyers looking to expand their large farming operations play a significant factor in increasing land values. Such buyers tend to have a dominance in local markets, where the buyer side is reduced to a small number of large operations. They report that federal farm program direct payments are not believed to have an effect on land values. Direct payments are paid to farmers by the federal government regardless of price or production. However, the report acknowledges that federal farm subsidies for crop insurance are capitalized into land values. The federal government pays, on average, 62% of the premiums for crop insurance. As land prices continue to increase, this can be challenging for local beginning farmers seeking to get started. Virginia Meyer, Rural Organizer at the Center for Rural Affairs in Lyons, works to help beginning farmers get started. She notes three primary ways in which beginning farmers gain access to land. Some beginning farmers lease land from family members. “Most medium to large scale beginning farmers are able to access land through family connections and working with family members who are cutting back or retiring from farming,” Virginia noted. Beginning farmers without access to family-owned land have the greatest challenge. “They compete for leases against bigger farmers who can pay more to lease the ground. I’ve heard of beginners leasing less-than-desirable ground because the bigger farms are not interested in that ground.” This includes land that is hilly, rocky, and has poor soil quality. A third group of beginners opts to add value into working less land. They may choose to grow vegetables and fruits or raise poultry and other small livestock. “Beginners can generally afford smaller acreages while large tracts of land are out of reach,” she explained. Though the value of land is currently on the rise, the University of Nebraska reports that net rates of return, however, have been on a steady decrease since 1990. In Northeast Nebraska, the net rate of return for irrigated land in 1990 was 6.9%. In 2013, it is almost half that, at 3.8%. That means that for land priced at $10,000 per acre, the return on investment would be $380 per acre in annual net earnings. Currently, the rise in land values has not hindered buyers from purchasing land to expand their operations. If sharp downturns are experienced in annual returns to land, or if interest rates were to rise, a decrease in land value could occur. For now, property owners in Burt County continue to see some of the highest land values in Northeast Nebraska. Continue reading
UK Biomass: Savoir Or Destroyer?
By Joao Peixe | Thu, 19 September 2013 Taking effect April 2015, all biomass-fired power generators in the UK will have to prove that they are doing more good than harm or face government funding cuts. UK government has warned that biomass-fired power generators have to prove the sustainability of their fuel or lose over £1 billion in new investment financing. In the UK, biomass power generation supports over 3,000 jobs, but the government isn’t necessarily convinced it’s supporting biodiversity. This is something the beneficiaries of the government’s financial largesse will have to prove in line with new regulatory criteria. As of April 2015, the new criteria will apply to all generators 1 MW capacity or more using solid biomass or biogas feedstock, and generators will have to prove that biomass has been sourced using sustainable forest management practices. Ideally, biomass electricity will represent a 70% greenhouse gas savings over fossil fuel as long as the biomass (in this case wood fuel) itself is from sustainable sources. Minister for energy and climate change Greg Barker said that the new criteria will boost investor certainty and simultaneously ensure that the biomass is delivered in a transparent and sustainable way. “Independent audit reports will need to show proof that sustainable harvest rates are used in conjunction with biodiversity protection and respect of land use rights for indigenous populations,” the minister was quoted as saying. There will be no further changes to the criteria before 2027, according to the government, and all biomass generators who adhere to the new guidelines will continue to receive subsidies. Continue reading
