The Country 16/07/26: Peter Newbold talks to Jamie Mackay

The GM of PGG Wrightson Real Estate updates a buoyant rural market and puts on his livestock division hat to talk about the threat of a Super El Niño.

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Episode Transcript

Speaker 1 (00:00):
Monthly. Here on the Country, we tell you how much
your farm is worth. Peter newbol Gm of PGG Rights
and joins us. Peter, is your farm worth more than
it was a month ago when we last chatted.

Speaker 2 (00:10):
Yeah, I think it is in all sectors. Really. Is
it massive?

Speaker 3 (00:13):
No, but definitely there's renewed interest in all the sectors.
I think there's good momentum. The real community is in
a good space, and I guess what's happening overseas you
could argue was a little bit more stable. So I
think we're going to see continued momentum in values to
some point and volumes.

Speaker 1 (00:35):
Well, let's start with the biggest act in town of
a dairy industry or dairy farms. There's been a lot
of interest in dairy farms. But as we know, and
we've been discussing this this week on the Country, the
margins are getting squeezed awe it because of those events
happening offshore. The cost side of the ledger has gone up,
the milk forecast prices come down. As it stands at

(00:57):
the moment, you won't be making a fortune. But as
we know, it's very fickle and can go up and
down very quickly.

Speaker 3 (01:05):
Yeah, Look, it's an interesting space. I still think we'll
see continuity there in sales.

Speaker 2 (01:11):
And then the other thing that I remember, there's.

Speaker 3 (01:13):
A lot of conversions taking place, so probably on the
other side of it is finding enough stock to fill
those spaces.

Speaker 2 (01:20):
So I still think we'll see reasonable sales there.

Speaker 3 (01:25):
I think there'll be a shortage of listings, so I
think it'll continue on there. How would I put it steadily,
I think we were going to see the biggest upside
this spring is in the sheep and beef and it's
been a bit of surprise for me the activity that's
taking place already, especially in the what I call you
know south, you know south of sort of North Otago,

(01:48):
Otago and south and for example, a lot of activity
taking place there. And then when you look at what's
coming up in the spring, and I think it'll all
happen early spring. I think sheep and beef are going
to be the game in town this morning.

Speaker 1 (02:03):
Well, I'm loving the renaissance and profitability for especially the
sheep farmers. It's lying overdue, so there's increased interests there
and the returns are there to be taken at the moment.
And then we look at beef. See, beef just has
a really good medium term outlook and.

Speaker 3 (02:20):
When you look at it, there's nothing to say that
it's not going to continue on. And that's in cheap
n and beef. So you know, if we look as
a business, we look forward, unless something happens offshore, then
I think that'll just continue on. And I think because
there are good returns there. It puts people in a
space where they can think about those other things.

Speaker 2 (02:39):
Which we've talked about previously, about.

Speaker 3 (02:41):
Bringing family into the farm or selling or whatever, those
whole things in and around succession.

Speaker 2 (02:47):
So it's looking good now.

Speaker 1 (02:48):
I know that some people in the horticulture industry, especially
in viticulture, are facing tough times, but it would be
fair to say Kiwi fruits on a real high at
the moment. Are we getting back to those silly prices?
Can we thro a orchards?

Speaker 3 (03:02):
I don't know if we'll get back to the silly prices,
but if you go back to October last year, that's
probably when it sort of kicked back into gear and
we've seen an uplifting value since October up towards twenty percent.
I think the big thing we're going to see this
coming season is not so many new listings, but I
think we're going to see a push in and around

(03:22):
demand for them and that could influence price moving up again.
And when you look at it, you know you're getting
good returns in the Kiwi fruite sector where you've got
a lot of third party work taking place, so excuse me,
it does take the pressure off. So I think we're
going to see not so many listing opportunities, but I

(03:45):
think we're going to see an upside and value.

Speaker 1 (03:47):
PGG writs and certainly get their pound of flesh out
of you. Not only do you run the real estate division,
you run the livestock division. Now there's a lot of
noise around at the moment about the al ninos. Some
are calling it a super al Nino. What you guys
on the ground telling you and what are the farmers doing?
Do you think to prepare for this?

Speaker 3 (04:06):
Yeah, Look, there's a lot of noise both internally and externally,
and I think what's taken place at the moment is
a lot of people are probably looking ahead and thinking
how do we manage our farm as we come into
that sort of I guess summer period. So I think
a lot of them have been cautious. None of us
really know what will happen. But if there is doubt

(04:28):
a drought, that will affect certain parts of our livestock business.
And I think just at the moment people are just
being cautious in and around how they're going to operate
next well, coming into the summer months. But look, until
it happens, I think we've still got to remain positive.
But you know the other thing you've got to think
is the East Coast have had some challenges in recent times.

Speaker 2 (04:50):
And it'd be sad to think that they get clovered
with you know, super dry conditions.

Speaker 1 (04:55):
Also, well, there's plenty of moisture in the subsoil at
the moment. It would be fair to say too much
of it's sloshing about in many cases. But yep, I
guess foe warned is forearmed, And those guys on the
east coast of both islands are very used to farming
through dry summers. That's what you get when you live
on the East coast. Peter Newbold, thank you very much
for your time. We'll catch you again next month here.

Speaker 2 (05:17):
Thanks Jeremie, have a good afternoon.