December 8, 2025 • 44 mins
A quiet reset is reshaping New Zealand’s rural property market, and the signals are clear: liquidity is back, vendors are willing, and buyers are disciplined. In this episode, Matt and Wade sit down with Conrad Wilkshire, General Manager of Property Brokers. The conversation digs into why month-on-month sales have returned to the 10-year median, what’s powering renewed confidence, and how dairy is leading big-ticket transactions while sheep and beef rebuild on firm ground. Tune in to discover what is driving the rural property market reset.
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Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
SPEAKER_00 (00:04):
G'day, and welcome to Feed for Thought, a regular
podcast from Pioneer, coveringeverything from farm systems to
crops and products and much,much more.
SPEAKER_03 (00:15):
Right-ho, welcome back to Feed for Thought.
My name is Matt Delhi, and asalways I've got Wade Bell with
me.
Welcome Wade.
G'day Matt, how are you?
Good thanks, and we're back inuh in the middle of two again.
I'm uh hosting you pretty well,I think.
Another fine day, finish day inthe middle of two.
SPEAKER_04 (00:30):
Yeah, I wouldn't call it stunning weather, mate,
but it's uh it's it's not bad.
SPEAKER_03 (00:34):
And we're in the CBD uh in uh Palmer North with
Conrad Wilkshire from PropertyBrokers.
Welcome, Conrad.
Thank you, Matt, and uh welcomeWade.
Cheers.
This is uh a great little setupyou guys have got here at
Property Brokers in in townhere.
SPEAKER_02 (00:47):
Yeah, this is our head office, and yeah, we're
very proud to be here and it'suh served us well.
We've been here uh we'll be 40years next year.
So you know it's it's been HQfor a long time and it's um
probably known more as as asupport center these days, um uh
because where our network goesliterally from Fongaray down to
Cargo.
So it's uh it's a bit differentfrom where we were 40 years ago
(01:09):
with a little cottage and abouteight people in it.
Yeah.
SPEAKER_04 (01:11):
Do you do you want to just uh expand on the history
a little bit more on on PropertyBro?
Because it's quite aninteresting story.
SPEAKER_02 (01:17):
Yeah, it is.
It's one of the reasons I joinedit eight years ago, actually, is
it's a family-owned business.
Um and it was the founder was uhTim Morton, and he's still very
involved in the country today asthe chairman.
And his son um Guy Morton nowruns as managing director.
But you know, it's it was basedon a philosophy of a handshake
and your words you bond, quitetraditional values.
(01:38):
I mean, Tim went to Lincoln andhas got a strong farming
background himself, uh thoughhe's built a huge business
that's um you know covers allfacets of real estate.
And um, those sort of ethics umhave served him really well.
And so they set out a strategyto be really strong, uh,
initially in the Lower NorthIsland and very provincially
based.
And then as as the business grewand and off the back of the
(02:01):
relationship he built over along time, and a lot of other
businesses sort of put theirhand up to say, Oh, we'd like to
work with the brand, like to uhmaybe build bring bring our
story alongside yours.
And so, you know, all of asudden um we had a much bigger
footprint, uh, including theSouth Island.
And then uh uh the farmland's uhmerger came along in about 2000
November 2019.
We put that business uh togetheralongside ours, and that gave us
(02:24):
a much stronger footprint up anddown the country as well.
And then other businesses joinedus off the back of that.
So it's there's been someacquisitions in there, but I'd
have to say it's most of it'sbeen relationships and organic
growth.
And and and most importantly, isholding good the good people
that have come alongside.
It's all very well.
Um, you see this a lot withbusinesses that grow.
You you put a lot of you putbusinesses together, don't
(02:46):
always keep the the actualessence of what that business
was in the first place.
And we've been able to achievethat.
Uh I know from my perspective,I've been involved with the
rural business over this lasteight years.
It's um been really great to seeuh people come into the business
and also the people that helpset it up uh in combination.
We've gone from about sixpercent share of that raw market
(03:06):
to about uh 26%.
So we're we're proud of that inthe sense that it's you know
we've uh been able to servethose clients well and and the
the team that supports them havebeen able to grow through their
businesses uh very successfullytoo.
SPEAKER_04 (03:18):
Yeah, yeah.
And all regionally based,largely you you you seem to be
out of the main centres in theregions?
SPEAKER_02 (03:24):
I I think you know, Tim's always trying to keep it
pretty simple.
He he always felt that there'sunlikely to be a strategic plan
to take over White Booker orFielding or Parto or Ashburton.
And um, you know, at the end ofthe day, uh from you know any
sort of big corporate play in inin the CBDs, because we we
aren't in Auckland or Hamiltonor Wellington or Christchurch,
(03:47):
we are in the provinces.
And I suppose we'd say, youknow, if one can get information
on there, our roots go deeper asfar as the provinces go.
We uh we're sort of centred inserving rural communities and
playing our part in ruralcommunities.
And off the back of that, weseem to do a lot of business
because particularly inprovincial New Zealand,
relationships really do count.
And um you don't get away withmuch in a small community.
(04:08):
You you either front up or youdon't, there's not a lot of
clarifying.
I don't seem too much halfway inthere.
SPEAKER_03 (04:14):
Yeah, yeah.
And we might pick up a bit ofthat business and a bit of a bit
around the dynamics goingforward.
But um before we do, just alittle bit about your background
because you haven't always beenin the real estate game.
SPEAKER_02 (04:25):
No, there's probably three legs to my career.
Um, well, actually, well, if Istart from the very beginning, I
grew up in Hawks Bay and trainedas a farm cadet on Smedley
Station, which I have a bit todo with now.
We can touch on that a bit lateron if you like.
But um they gave me ascholarship to go to Mercy and
studied agriculture and then didbusiness studies, and off the
back of that, uh took anopportunity in finance with the
(04:46):
Royal Banking Corporation in thelate 80s, which was a very, very
uh different environment.
And um, I was off the back ofall the reforms.
So um had a wonderful trainingopportunity there, and that set
up my banking career, and Ijoined the BNZ.
And so I had uh I was almost 20years out of banking, but the
first you know, big chapter ofmy career was agri-banking, and
I was sort of GM agri for BNZwhen I uh finished up there in
(05:08):
2006.
Uh so that was agri-banking anda little bit offshore stuff, and
then um back to um went there,went farming on our own account
at that stage, and then took anopportunity after a couple of
droughts, it became uh anopportunity came knocking around
um maybe joining um FMG.
And um so I joined FMG and hadalmost nine years there and
(05:30):
ended up uh chief operationsofficer there.
So, and so sort of uh farminsurance and and personal
insurance and actually having alook at how we actually support
our farming community.
And we um had a you know, wewere really challenged through
that period with earthquakes andstorms and the like, so much uh
like we've had in the last weekwith 10 10 days of solid wind.
(05:52):
So um, so that that's thatformed a lot of my career.
And then um in 2017 I joinedproperty brokers and we've had a
had I've had eight years there.
So I suppose you'd sum it up asagrifinance, agri-insurance, and
now uh agri real estate.
SPEAKER_04 (06:06):
Yeah, but but all sort of sales-based
relationships, not roles.
SPEAKER_02 (06:09):
Very much business development, helping um, if you
like, build um teams and workingthrough those teams, um, you
know, helping the marketdevelopment and making sure that
I think I've been very fortunatein my career.
I've had a huge passion forfarming, but I've been able to
serve farming through uhbringing specialist support
alongside farmers.
And I've always always felt thatspecialist teams can do uh
(06:30):
specialist agri teams can do somuch more for agriculents.
When I joined our the bankingsector, I mean most of the uh
the training banks had verylittle limited farming
background or capability tosupport farmers.
And um, so we, you know, we werethrough at the time there was
only three agri specialists inthe Benz when I joined.
Yeah.
So, you know, it's uh we wereable to help shape and change a
(06:53):
lot of the policies thatsupported farmers.
And that was and similarly withFMG, it had a tremendous story
about it.
Uh it goes back well over 110plus years.
Uh, but you know, it probablyhad never had had a rural
graduate recruitment program orhad any deliberate strategy to
connect with those ruralcommunities in a in a sort of a
in the modern era.
Yeah.
And um, so we were able to help,you know, through a really good
(07:16):
team, um reframe all that.
And um the property the propertyside here is we've always had
wonderful relationships withfarmers, um, but actually the
ability to operate nationallyand leverage our capability for
the benefit of farmers and getcapital flowing between the
islands and build those networksup.
That's that's been the realchallenge, and it's been a we've
been able to achieve that, andit's been quite exciting.
SPEAKER_03 (07:37):
Yeah.
You've talked aboutrelationships, but how have the
deals, I mean you've been in theagri in the business, the
banking, sorry, um, insurance,but how have the the deals
almost changed?
Is there been a I mean you'vegot drones taking all this
wonderful footage out there now,but and is there other tools
that the team is using?
SPEAKER_02 (07:57):
Oh drones is a good one because uh a couple of them
have gone missing in the lastweek.
So doesn't pay to put them up.
SPEAKER_03 (08:06):
Wade knows because his flight was a bit uh dodgy as
well.
SPEAKER_04 (08:09):
But I can imagine that in Palmers the North, to be
fair.
Putting a drone up would be a uhtricky exercise.
SPEAKER_02 (08:14):
I think um I look back at the days I had in my
banking career and they weregreat days because there was a
uh the level of regulation andcompliance was completely
different, and we were able tooperate um, you know, with our
clients and have quite a lot ofautonomy.
Um whereas today the regulationframeworks everybody has to
operate under, and farming's noexception.
(08:35):
You think about the billions ofdollars that have gone into
compliance for sustainablefarming.
So the world's changed, I think,in in my career significantly.
Uh, and saying that one thingI'd say is common to um today as
it was uh 30 years ago, um, isthat uh relationships are still
central to agribusiness.
(08:55):
And um you've got to usetechnology to to serve it well.
Um you know, um my son's outworking on a station in Hawke's
Bay and he's out on a horse, buthe also uses a drone.
Yeah.
Uh so that's on the side saddlethere if he needs it to save um
double working the dogs andactually making sure exactly
where the cattle are before wego that way.
(09:15):
So I think it's no different forus.
We've got drones and technology,but equally we're still um it's
an enabler to be able to executewell, maintain really good
standards in terms of marketingand the collateral that supports
the farm campaign.
But ultimately you still have tohave the confidence of the
vendor and the and the and theright team around you to get the
job done.
Yeah, so almost like therelationship stuff is the
(09:37):
foundation all of that stuff isjust But you g you can't ignore
uh the you know, we spend well,we're on a podcast right now.
We never would have entertainedthat idea in the past.
And word of mouth was probablythe the big guy.
Yeah.
So, you know, we are you know,we're in a technology-enabled
world, so um the moment we thinkwe can step us uh out from that
(09:58):
and not have uh a part in that,then I think we're on a slippery
slope.
SPEAKER_03 (10:01):
Yeah.
The rural market's been uhpretty dynamic of late, and it's
uh is definitely different towhat it was 12 months ago.
It's a fast-moving beast at themoment.
Could you give us a bit of a awrap on where we're at at the
moment?
SPEAKER_02 (10:15):
I I actually think this this calendar year has been
a real sea change in rural realestate.
Uh and it was recoveringsomewhat and through towards
calendar, you know, uh toDecember 24th.
But if if I have a look at thesales data, it is uh the
successive months from Januarythrough to now, where you're
(10:35):
seeing month on month, comparedto the same time last year, a
significant shift in sales.
So everybody talks about what'sgoing to happen this season and
a reset.
But actually, the reset hasactually happened.
And uh just to give a context tothat, we're we're now seeing
monthly sales consistently allcalendar year, now in line with
(10:56):
the 10-year median for thenumber of farms sold in that
month.
Now, so not only and to give acontext, the last two years have
been some of the hardest goingyears for farmers.
And even the dairy guys werehaving on-farm inflation and
whatever, you know, the returnswere solid.
But the high interest rates uhwere having a real impact on
farming.
(11:16):
And uh and the commodity cyclefor the sheep beef sector
certainly wasn't as strong aswhat it is right now.
So if I look at um, you know,the governance role I am
involved with the station at themoment, we we we were tossing up
whether we were budgeting thistime last year, tossing up
whether we're budging$6.50 forlamb, and it was nothing like
the cattle for, and we'relooking at deferring fertilizer,
(11:36):
and we had pretty honestinterest rates that we had yet
to reset.
All that's changed dramatically.
And I and I believe that we werevery typical of a lot of farming
situations.
So the there's been in the dairynow have had uh heading into
their third good year in a row,and that's and the Fonterra
story continues to consolidate.
(11:57):
So that's but a lot of that hasbeen uh well telegraphed.
So the the market today isoperating at levels already,
this is before the season reallyuh firms up, at or around the
10-year average.
Wow.
The last 10 years though hasbeen very tough for uh farming,
um, and there's been a lot ofvolatility, and and you've seen
(12:19):
um you haven't seen the sort ofuh particularly from the dairy
point of view, anything like thecapital growth yet.
And so that's so again, I Iwould say that the the alignment
with the 10-year averageprobably isn't where I see the
market going over the next fiveyears.
Yep.
Because this last 10 years hasbeen, if you think about what's
(12:40):
beset farming and what farming'shad to weather and the
investment in weather, uh notjust in terms of the physical
weather, but just in terms ofall the environmental settings,
all the policy settings,interest rates, what have you.
It has been or or even access tocapital, because there was a
period in 2019 where finance hadnever been cheaper, uh, but the
it was just very difficult forfarmers to be able to access it
(13:02):
because of all the uh regulatorysettings with Credit Credit
Credit Contracts Act, etc.
etc.
So these and and reserve banksettings on you know pricing for
farm debt.
So you you've had all of that toplay through.
So this and yeah, if we usedairy as a case study, it has
its contribution to GDP orexports, its contribution to
(13:23):
exports has is literally doubledand without any additional milk.
And and I think you that'sthat's really significant
because you've you've had um youknow hardly a kilogram more milk
solids in 10 years, but it'sgone from probably 16 billion of
contribution to the economy tocloser to what 29 billion on the
current forecast, and it's gonnabreak 30 anytime soon.
(13:46):
So, and and Frontera itself isin good heart.
So that's uh these are thingsthat I've discussed elsewhere.
And that look, I I just think umthat farmers aren't gonna lose
sight of all the hard-foughtlessons of the last 10 years,
but I think it's not thebenchmark from which decisions
will be made.
I think the Ford outlook is alot stronger, and you've seen
some fundamental settings aroundmethane and others that probably
(14:09):
have really shaped or limitedthe confidence farmers would
have to take.
Because when you when you buy aproperty, um, you're looking at
the next five to ten years inmind.
SPEAKER_05 (14:19):
Yeah.
SPEAKER_02 (14:19):
And you're trying to, you're trying to look
through the here and now andactually try and figure out
actually, and for a lot offarmers, the safest bet was to
do nothing because there wasjust so much uncertainty.
And even those that are wellcapitalized were saying, Well,
you know, I don't know.
I've, you know, Joe, my bestmate down the road had a crack
and it hasn't served himparticularly well in the last
five years.
Uh whereas that's I think goingto change.
SPEAKER_03 (14:41):
So is that aspect of particularly for dairy.
Yeah.
So is the aspect of people thathave held back probably for the
last couple of years of puttingtheir properties on the market.
And then we've also got thesebusinesses that have been kind
of prepp, ready to go and andlaunch and just waiting to find
the perfect time, and that'swhere we're at right now.
SPEAKER_02 (14:58):
Yeah, I think there's definitely there's
definitely, I think, a a backlogof assets coming forward.
But I don't believe the buyersare going to be paying excessive
premiums because of everythingwe've just been chatting
chatting about.
What I do uh believe though,there's going to be a lot more
liquidity in the market.
You're you're gonna have willingbuyers and you're gonna have
(15:19):
willing sellers.
Um we had we've had willingsellers, but there just hasn't
been the we you know, we'd havefield days and there would be
you know hardly anybody turn up.
Even the bank manager wouldhardly turn up.
Uh whereas that's particularlyin the last couple of years.
And they were great assets.
Now we've got we've we've hadassets down in you know centr in
Central North Ireland, which isnot exactly on the doorstep of
(15:42):
anywhere.
And we've had you know 30 pluspeople turn up.
Yeah.
So, you know, I think andquality assets coming to the
market that have been uh wherethere's been good stewardship
and it's they've farmed to goodpractices and standards.
Well, I think there's everyconfidence we we can find demand
for that.
And uh importantly, there'scredit appetite um to have a
(16:03):
look at uh have a look at that.
SPEAKER_04 (16:05):
So so to kind of summarize that up, so there's
there's confidence there, butperhaps uh not not
overconfidence, theoverconfidence being the some of
the lessons learnt um fromprevious decades, uh if you
like, around sort ofover-leveraging or well, I think
you know there was a lot ofpre-GFC.
SPEAKER_02 (16:21):
You know, we gotta remember the GFC was not uh a
normal event, and and that andthat what the repercussions of
that have took uh a very longtime to wash through.
And then neither was COVID.
So these things are actually uhsignificant events in their own
right.
Uh so people are now wary ofglobal type scenarios and the
(16:42):
impact it can have.
And then equally, yeah, thecompliance and things.
So I think people are just goingto be a bit more measured than
in the past.
You know, if you think about umthe deregulation that went
through from the, you know, howregulated we were in the 70s to
how deregulated we were in the80s.
There was a a period where ifyou sat still, you just got left
(17:02):
behind.
And so I don't believe thatthose investment decisions were
just blind faith.
I mean, you you just look backover a decade and a half, and if
you'd sat out of it, you'd missyou'd miss the boat entirely.
SPEAKER_01 (17:13):
Yeah.
SPEAKER_02 (17:14):
In fact, you know, in my banking career, my my team
was forever being um chastisedfor not having being braver with
credit because uh I can rememberthose, some of those.
Yeah, because you know, we'rewe'd we'd fail to support a
decision and you know they'veprobably gone up a million
dollars in the preceding 12months.
(17:34):
So um so what I'd say is that weare in this period now where
people are, I think, uh a bitwiser and and have the benefit
to make that.
Now, if you've got a premiumblock not too big in scale on
the town boundary on top ofalluvial soils, I think you're
still gonna see some and and theand the neighbour's well
(17:55):
capitalized.
Uh you're still gonna see uh abias there.
But if you're talking uh, youknow, you're uh 45 minutes to an
hour out of town and you've gotsome good soils and it's and
it's off reasonable scale,people are gonna be looking at
what it returns.
Yeah.
And then obviously they'll beinvesting on the strength that
they believe that the underlyingasset will grow in value.
SPEAKER_01 (18:13):
Yeah.
SPEAKER_02 (18:13):
Because I I think uh farmers are not naive.
No, nobody would buy aninvestment where they can't
think they can get out of it.
You need to be confident thatactually there's some liquidity
in the asset you've got so thatif you have a change in
circumstance or a change inhealth or whatever the scenario
might be, that you can actuallyexit the asset as well as invest
(18:33):
in it.
And so I think we're actually inthat phase now, and I think
you're gonna see more confidencewith people prepared to operate.
Uh, but I don't think you'regonna see this um capital gain
level of people doubling up thevalue of their assets.
Yeah, even so the best exampleof that would be um the sheep
and beef sector, uh, whereyou've seen the golden ticket
(18:54):
outcome with the billion trees,and people forget that Shane
James was actually the architectof all that.
It is that, and he's stillfilling up all the country halls
and entertaining us all.
Uh and you know, he he's uhbrought a lot, I think, to um to
to politics in the last uh 18months, particularly.
(19:14):
But I think I think we, youknow, that that tree strategy uh
was basically unregulated uhwith open ticket overseas
investment scenarios.
And so you but even with allthat, you do and we certainly
send a lot of land convert totrees, but if you actually have
a look at the number of farmssold, it it it could have been a
(19:36):
lot, lot more.
Um because actually farmers werestill uh committed to the
farming future.
So it's the key point there, Ithink, is that the capital gain
we had was significant.
Yeah.
Uh but it wasn't, it was built,it wasn't built around farming
and people could see throughthat.
SPEAKER_03 (19:53):
Yeah.
And that kind of land usechange.
I mean, the next you know, 24months is it doesn't seem like
there's gonna be a lot of that.
We might have some versions andstuff down, dairy conversions
down south.
But do you feel it's gonna bemore um family businesses
growing or someone taking abigger step versus going in and
(20:13):
making a wholesale change to thesystem?
SPEAKER_02 (20:16):
Yeah, probably unpack that two parts.
One, family, and then maybe talkabout the the uh corporate
activity in a large scale,because I think corporate
activity gets a lot of air time,but actually it's the family
businesses that drive ourbusiness.
Yeah, and the corporate activityis significant in its own right,
but it is the the day-to-dayfamily businesses that support I
(20:38):
think support our primary sectormore than people perceive.
SPEAKER_05 (20:40):
Yeah.
SPEAKER_02 (20:41):
But if you have a look at what drives sheep and
beef valuations, uh you had thisunregulated natural capital
carbon story and you had noregulation around uh the the
conversion of pasture to treesor where those trees were
actually being planted.
(21:02):
You know, there was all thisrhetoric around right tree,
right place.
But essentially, uh you want toput trees on the best country
you can if you're into trees.
SPEAKER_04 (21:10):
It's easy easy to get access to.
SPEAKER_02 (21:12):
Yeah, because of the extraction costs on use land use
seven uh are significant to theextent when you look at the
overseas investment office andyou look at the decisions that
were made on um overseasinvestment decisions, they were
all land use six, very, verylittle land use seven.
Um yet everybody bundles wholecountry into the same land use.
Well, people buying trees don'tthey they've they've been very
(21:32):
astute where they've beenbuying.
They they want to buy the bestclass of land they can to grow
trees as close to a port as theycan.
So that that led to a lot of uhparticularly on the East Coast
and more latterly in Southland,has led to a lot of, you know,
some significant revaluations.
Um but that that has washedthrough the um and I think we
(21:54):
are now we've gone fromunregulated to regulated.
And that's quite a change.
Uh and people haven't reallyperceived that change because
we've had this moratorium whichallowed everybody to run for the
line under this moratorium thatwas there, that's essentially
closed for around ETSregistrations on pasture and
forestry.
But going forward, there's goingto be there's a much more
(22:16):
regulation as to where you'replanting.
And and also local governmentnow has a much stronger mandate
around what gets planted where.
And then you also have theoverseas investment office now
not offering sort of blanketapprovals and uh the fact
there's certain categories ofregions where that have been hit
with cyclones and like that.
They're they've actually sort ofearmarked as sort of no fly
(22:39):
zones.
Uh so for further, you know,automatic consents.
And you've got to remember thatunder that special forestry
test, you had something like 86decisions on the trot, but not
one declined, all in favour ofpasture to forestry conversion.
So you you just have to be alittle bit more circumspect and
say, well, that was uh hadnothing to do with farming.
It was a stroke of a pen.
(23:00):
Yeah.
You had this permanent forestry,which was just like
hyperinflation, where it didn'tmatter where the forestry was
being planted, you could accessall this carbon.
Um so that th those things havehave stepped back.
And then the carbon marketitself has has struggled a bit
uh to achieve some of its aims.
Uh, I think uh there's a lotmore discipline around that at
the moment, and I see everyexpectation the carbon price
(23:22):
will improve.
Um, but again, that market isbuilt on confidence, and you
actually um only have to listento Donald Trump as recentness
this morning talking about purecoal and how wonderful coal is.
Uh that one could have lose abit of confidence in the carbon
market when you start seeingthen uh um the world's biggest
(23:42):
leader sort of advocating asstrong as he can for everything
that he does.
So, you know, all I'd say isthat I think the ETS is here to
stay, I think it has a role toplay, but I think it's in a much
more, it's in a much moreregulated framework than it has
in the past.
SPEAKER_04 (23:55):
Yeah.
Yeah.
So it sounds like with that, youknow, some of that sort of if if
we'd put the the the ETS or orthe carbon market into that
compliance base kind of maturedor s or stabilized uh a little
bit.
Like you say a lot of that stuffis washing through, people are
getting more comf comfortable,maybe things are settling a
little bit.
SPEAKER_03 (24:15):
Environmentally.
SPEAKER_02 (24:16):
So yeah, and I think also um the revalu, I mean, on
the one hand, uh farmercommunity did not enjoy the
contesting of land, and a lot offarmers were coming as farmers
were coming as underbidders ongood partial country and you
know, some really good countrythat got converted in trees,
which you know, really put somebig challenges in some rural
communities that I'm reallyclose to.
(24:37):
So there's there's no questionabout the impact, and that has
played out, and that's butequally it had a huge impact on
the revaluations of all hillcountry.
So on the one hand, you were youwere literally we saw the
doubling of and then in this,you know, I can think of country
not far from here, which was wecould struggle to get four and a
(24:57):
half thousand hectare, was goingfor thirteen thousand a hectare.
Um so that that that was sobasically the the cheap land got
very expensive.
Yeah.
And and that made the expensive,what was historically expensive
land look very cheap because youcould actually literally walk
out of your hook country blockand go and buy something flat or
yeah, much closer to town.
SPEAKER_04 (25:16):
Yeah.
SPEAKER_02 (25:17):
So it hasn't all been bad, but however, it has
been very um challenging.
And and I think what we'reseeing is uh some of those
evaluation hype has rolled out,and we're now seeing land in
hill country actually at um morethe long-term fundamental
values.
And and and I think farmersthemselves now are are probably
a little bit more in tune withwhat they might do with their
(25:39):
land use and some of themactually taking advantage of
some of the policy settingsthemselves to actually get
access to some of those carbonstorage if they want it, which
actually has proved to be veryhelpful for some of those farms.
Whereas I think for thosefarmers that actually look at
their land use and actually workout what their stocking rates
are and where their money iscoming from, it it could well be
those that actually retire 20%of their farm maybe end up
(26:02):
buying the s the station nextdoor versus those that just
simply play to the lamb schedulemay find it harder to compete
with those that have gotdiversified income.
SPEAKER_03 (26:11):
Let's um roll down off the hills and into the flats
because the arable sector's uhin a different space, I suppose.
And it's one that we're probablyplaying closely with as well.
When we think about down south,there's a bit of change down
there.
How do you see that playing out?
SPEAKER_02 (26:26):
Well, yeah, it's the arable sector's hard um because
you've got such great soils, andbut you're up against well, you
guys know more about this than Ido, but you're up against
Australia, which obviously youknow through your your parent
company, et cetera.
They're we're just we're justnot a strong, it's we're just
(26:47):
not a strong forceinternationally, so we are very
you know exposed there.
And the domestic market justisn't strong enough.
And then you've also had um thestock feed business go under a
lot of pressure because there'sbeen a lot of change there as
well.
So even even some of the safeoptions aren't that easy anymore
because actually um you've hadfarm systems probably step back
(27:09):
a bit from the real intensivefarm systems to sort of more
middle ground, and that you knowthere just hasn't been that
demand for maize, maybe the wayit was in the past.
I mean, you guys are theexperts.
SPEAKER_03 (27:20):
We just thought we'd get your opinion.
But yeah, dead right, ships canjust effectively come in and and
change those markets.
Yeah, like I say, down in thatCanary region, we're seeing a a
definite impact, and maybethat's why we're starting to see
a bit of interest in in thedairy.
SPEAKER_02 (27:35):
Yeah, I think even harder too was um uh those
compliance legislativerequirements, national policy
state national policystatements, uh limited land use
like grazing.
Where because of that, you hadgrazing properties that had
grandparented um dairy supportas part of their farm system, uh
(27:55):
selling for more than animproved dairy farm um not so
long ago, yeah, three or fouryears ago, which well, three
years ago.
And so that that didn't make alot of sense.
So, I mean, for those arablefarmers that were wanting to
maybe diversify into some dairysupport or any other kind of
land use, it was very hard to dothat.
And I think it's not just aboutmaybe putting more cow sheds in
place, it's just having a lookat that.
(28:17):
And of course, many of them haveinvested significantly in the
water schemes there as well.
So that that's sort of brought aits own headwind of um, you
know, the a baked-in cost thatneeds to be recovered.
SPEAKER_03 (28:28):
Yeah.
unknown (28:29):
Yeah.
SPEAKER_04 (28:29):
And just just looping around, I guess picking
up on some of that, I guess,South Island market, but in
terms of the rural market as awhole, what's kind of leading
the charge, if you like, at themoment, uh, when you kind of
think about you, you know,there's a lot of positivity,
there's a lot of confidencegoing on, you know, and and we
hear a lot about dairy, but uhis it dairy that's kind of
(28:49):
leading leading the way in thatrural sales market, or is it,
you know, where where's it at atthe moment and how do you see
that playing out over the next12 months?
SPEAKER_02 (28:58):
Wait, I I'd have to say it's across the board.
Yeah.
But dairy would be leading thatuh at this at this time,
particularly in the big end oftown in terms of the large
transactions.
So, yeah, so I think it'sdefinitely confidence across the
board.
I think if you look at it from asheep and beef perspective, it's
(29:18):
it the the the the changes we'reseeing, the improvements we're
seeing, most of them haven't hada full balance sheet year of
that benefit to actually lookback on.
Uh the the change happened, uhprobably the most of that change
really impacted this calendaryear.
Uh, the interest rate resetshave only just really started to
take effect.
And the cattle prices, you know,we're truck and trailer unit is
(29:42):
now well over 100,000.
That hasn't been part ofanybody's thinking for and I
mean the lamb schedule at themoment, and again, setting new
benchmarks.
So we we haven't seen that playthrough.
And then speaking from an exchicbeef farmer perspective, where
we used to finish about 5,000lambs, I mean, which is small
scale for many of the operationsthese days.
Is that you know, I think whatthey need to see is uh two or
(30:04):
three years in a row.
Yeah.
Um, which, you know, um nottaking weather or anything else
into the but just actually someconsistency for the chicken beef
guys.
And particularly I I do comeback to what sets a property
market.
So many so often people assumethat the confidence in the
farming sector that's will driveinvestment decisions.
(30:25):
Well that's true to a point, butthe biggest influences we have
found in terms of what drive themarket uh government stroke of
the pen type decisions that alsoall of a sudden open up
opportunities that just havebeen manufactured out of thin
air, and then or interest ratesand supporting credit appetite.
(30:46):
So if you can access credit atan affordable level and you have
banking support to access thecredit on you know reasonable
grounds, well then you've you'vegot a market.
Uh because you can have a lot ofpositive sentiment, you can be
doing a lot of things in yourbusiness, but if you can't
access capital at an affordablelevel and and um beat the cost
of capital, then you you'rereally you're struggling.
(31:08):
Because what why would you whywould you borrow at seven or
eight percent and be making afive percent return?
Or should be sometimes fivepercent would actually be a good
year.
SPEAKER_04 (31:17):
Yeah, yeah.
Yeah.
So to uh to expand on that uhthat question a little further,
so then who are the buyers outthere at the moment?
You know, is it is it the theneighbour or the you know the
existing land holders, or is itare we getting a lot of uh
foreign investment or whatwhat's the kind of the mix at
the moment, if you like?
SPEAKER_02 (31:35):
We haven't I'll come back to foreign investment.
We haven't had foreigninvestment operate in this
market since 2017.
SPEAKER_04 (31:40):
Yeah.
SPEAKER_02 (31:40):
We've had our first dairy to dairy decision with uh
direct foreign investment um inthe almost yeah, uh this just
this last month just gone.
So um it's so it's definitelyvery much onshore.
Yep.
Um and it is it is familybusinesses in the main uh uh
driving these investmentdecisions.
(32:01):
If you take the forestry out ofit and for sheep beef, it's uh
they are for family businessesgrowing.
If we look at uh that trend,that's the case with dairy um in
the South Island.
What we are seeing is uh what Icall uh agri corporate activity
is driving, you know, when youwe're seeing some of the largest
(32:22):
transactions we've seen in ourcareers ever.
Uh and and it's uh the pricesper hectare are are firm, but
they're not they're not over thetop.
But the scale of them, we've youknow, you're looking at$30,$40
million type transactions withone traction transaction on the
go at the moment, which would uhdwarf those numbers.
(32:42):
Um so if it was to complete.
So, you know, there's there'sthere's just lots, uh, lots on
the go.
Yeah.
So, you know, the business, youknow, there's this there's um
there's a number of businessesout there that actually have um
corporate agri that has workedextremely hard on managing their
balance sheet risk, havecomplied with any of the bank
(33:05):
commitments, have built a verygood track record in the market
with their business models, andthey are ready to to go.
So, and they operate at scale.
So that that is an influence.
But I think we'd be naive tothink that actually there aren't
a lot of really successfulfamily businesses.
If you take Canterbury with youknow over a million cows,
there's uh a hell of a actuallyjust really well structured
(33:27):
family businesses who've who'veum fought pretty hard to keep
their businesses exactly wherethey need it to be and are
taking advantage of it now.
And and I'd almost say some ofthe sterry impact we're seeing
at the moment is probably thatclassic saying that overnight
success takes about 10 years.
Yeah.
SPEAKER_03 (33:46):
I think that was Peter Alexander who quote the
source.
What about on the other end ofthe scale then?
So those looking to get intofarm ownership, are we seeing
any of that?
Uh yeah, it's I mean, you'reclose with that there and you
know, with your connection withSmedley, uh with people coming
through the system.
SPEAKER_02 (34:03):
Yeah.
Um Matt, I'd say in the whilethe the it's been kind of the
toughest real estate outlook umover, you know, if I look back
at uh uh 23 and 24 in terms ofthose calendar years, we
probably put more people intotheir first farm uh than we had
(34:24):
in a long time.
Because some of the people onthose, particularly if I think
about dairy for a moment, umthey the in those remoter areas
operating at scale, trying toget people to shift to remoter
areas.
And if I outline them, they'llget my local agents.
You'll get shot.
My local agents will ask me whatI was doing on this podcast.
(34:46):
But you know, the it was the uhincumbent contract milker who'd
worked there for five years,owned all the stock freehold,
knew the business intimately,had a great track record with
their local bank, but they justdidn't, and they had, you know,
probably seven-figure equity,but they didn't have the three
million large to probablycomplete the deal.
But the vendor also has oftenbeen there since, you know, the
(35:10):
early 2000s, uh, were was in theposition to actually say, well,
actually, um, okay, well, youbuy this title and you can lease
the other.
SPEAKER_04 (35:20):
Yeah.
And then to finance WN.
SPEAKER_02 (35:22):
Yeah.
And and there was a lease tobuy.
And I can tell you thosedecisions that were made, I
think they're gonna look backand say, well, actually, that
was a game changer.
Yeah.
Because there's no way thosevaluations are going south.
And you could say there's riskin that, yes, but there's risk
in anything.
But actually, how much risk?
Because they're they're theincumbents, they've been farming
there for quite a while.
They had a great relationshipwith the owner.
(35:43):
And if you're gonna take a riskon any scenario, sometimes it's
the person you know, then takinga bet on the outsider.
So we so there's thosescenarios, but then there's also
some, you know, I'm aware ofsome really quite large
transactions down south withsome really good young, you were
talking about earlier on thesome go-getters out there.
Well, there were some wonderfulgo-getters where we actually
introduced brand new parties,got them around the table, got
(36:04):
their bankers and theiraccountants around the table,
and we actually got transactionstogether and completed six or
seven million dollar type farmtransactions with their first
farm.
SPEAKER_04 (36:12):
Yeah, nice.
SPEAKER_02 (36:13):
So, you know, those things are, and we've been
running a series, we ran onelast week, called Footprint Into
Land.
And a lot a lot of our lot ofour work goes into helping
people see past their immediatefarm gate and maybe having
having a look at areas like, youknow, on the West Coast.
Um, you know, you know, theyalways say it rains at night.
That there they they've there'ssome wonderful farming for
(36:36):
opportunities there.
And we've been able to putpeople into properties over
there when you know was all thischat about Westland milk, they
went through a hugely toughtime.
But uh under Yeli, that it hasbeen a complete change.
And the the the balance sheetsof those farming businesses have
have performed extremely well,they've had good returns.
And so, you know, that land isvery affordable.
(36:57):
And um, for those who want tofarm, I think in my my banking
career, we we used to takepeople everywhere uh to get into
a farm.
Whereas now, if you're farmingin Dun Sandle, you know, um
yeah, we think Mayfield issomewhere that you know is is a
bit of a walk because everybodywants to stay in the area in
which they are.
And I think one of the thingsI'd say to to get ahead in
farming, many of the farmersthat I know now that are, you
(37:20):
know, closer to my age at thesort of knocking on the 60s
door, is that they they took alot of punts and they they
bought property in Northland andthen went to the Waikato, or
they went down Southland and,you know, and they've taken
their opportunities.
They took chances.
Yeah.
And I I can't see how that'schanged.
You're still going to take yourchances.
Yeah.
SPEAKER_04 (37:39):
Yeah.
Yeah.
SPEAKER_03 (37:41):
And then if we can dig into that Smedley piece,
because I know you're you'repassionate about uh those cadets
and and being one a former oneyourself, yeah.
And where that's led people.
SPEAKER_02 (37:51):
Yeah, 40 years ago, Matt.
Actually, 41 this is ever veryhonest about your age then,
yeah.
We don't get very many gueststhat are truly honest about
their age.
Uh you can get you can get awaywith a bit more as you get
older, I think.
Yeah, yeah.
So uh yeah, look, I I theopportunities in agriculture
today, compared to when Igraduated, um, I think are
(38:13):
unbelievable.
And, you know, um a farm managerwould have struggled to make
$25,000 a year uh back then.
And um, you know, I I think, youknow, if you uh if you wanted to
be a farm manager or alignyourself to these really good,
you know, great successfulgrowth businesses, and there's
just so many you can talk to inthe sheep and beef sector where
(38:34):
they are really growing verystrongly, and talent and key
people are the biggestinhibitors to growth, not access
to capital.
Um, I think the opportunitiesare great.
For those who want to buy theirown farm, uh, yes, sure, that
the these valuations aredaunting, but I don't remember
that anybody saying that when Iwas graduating um from Massie,
(38:55):
it was a sunset, agriculture wasa sunset industry.
And everybody's saying it's gotno show and we needed to be a
technology country.
So we still need to be atechnology company, but uh I
think agriculture is payingquite a few of the bills.
So, and that's you know, a longtime on now.
So I think for the young peoplecoming through, it is about
their work ethic, therelationships they build.
If they uh we we've we prideourselves on uh developing work
(39:18):
ready, uh really capablestockmen and stockmen and women.
Uh we've got uh equal number ofuh you know young women coming
forward these days, puttingtheir hand up for cadet chips.
And it's uh so that's so yourrole there now?
Oh sorry, yes, I I chair theHoward State Advisory Board,
which is uh a governance boardthat supports the public trust.
(39:40):
It has the custodial uhresponsibility for the station.
And we provide, I suppose, thatuh broader background to help
advise the public trust on youknow how how to work with and we
all typically the board has a astrong connection with the
station and and and and it'sbeen a great way to keep the
local community and invested inthat too.
And it's because it's it's it'sit's owned in trust, it's not
(40:03):
it's not it's not governmentowned.
So it's um so yeah, so we uhtake on 13 cadets a year, and
and well, we just interviewedour seniors and they're all
going, um, we need a f maybe afew more to think about
university as an option.
Because uh doing tertiary studydoesn't mean you don't go
farming, it's uh can just beanother enabler.
Um but also agribusiness careersare an option too.
(40:26):
But we do pride ourselves onactually um helping set an
attitude and a mindset aroundnot only just being a really
competent shepherd, but actuallysomebody that's actually can see
around the corner of the issuesand have a perspective and use
technology and all the otherthings that might come forward.
And I and I think that's the umthe wonderful thing about SMED.
(40:47):
It gives them it gives them uh Iwhat I look at their program,
we've got like a trainedpsychologist that um provides
you know really good thinking onuh how mindset tools and how to
and how to handle farmingbecause it's not all romantic
and it's there's a lot ofchallenges in farming.
So we give them really uh theythey like an accelerated
(41:08):
development program.
I mean, I look at some of thetraining that I've had in my
career and they are getting, youknow, really senior level
inputs, uh, supply chains,visiting, how how all the stock
selection works, rambreedingprograms, the whole nine yards.
And I know we've had goodmanagers through, and we've got
a new manager starting, um, GregCrombie, and he's been very
(41:28):
successful down in Mobile withLeafi Station and development of
that property.
So we we've got you know a greatrecipe there, but again, we've
had a real reset about ourbusiness model and what we need
to do.
And um, we're certainly notresting on our laurels in terms
of our history, we but we at theend of the day too, um, you've
still got to be able to uh bereally good with stock.
(41:50):
You've still got to be able towork with you've got to be able
to fence and do those thingsbecause if you if you want to
get your own farm, um paying fora lot of labour and getting
other people to do it isn't thatsuccessful.
I I remember in my bankingcareer, if you the candidate had
a trade behind them and had funsome formal training where
they'd had to live on not muchand had to make do and had to do
(42:13):
everything literally with thatnumber eight wire, uh, they were
always a good bet.
Versus if you have to paysomebody to do everything, it um
it can be a slippery slopepretty quickly.
SPEAKER_03 (42:22):
I'm I'm taking that option, but I don't have the
training in fencing.
So we'll drive past my.
Maybe while we're in the region,we could go and visit your
property and actually see whatyour skills are like there.
Yeah, let's look at the futurefor that, maybe.
Give me 10, 20 years, maybe.
But no.
Hey Conrad, that's beenfantastic.
Catch up.
Um I think relationship was abig piece at the start, is is a
(42:43):
that's a strong foundation ofany um property game and um
having successful uhinteractions there.
Um you had some real good quotesthroughout, and so and and
referenced your quotes as well,which is some sometimes uh a
miss.
But Wade, anything from you towrap?
SPEAKER_04 (42:59):
Uh probably uh yeah, no, I think you've largely got
it, mate.
I think the the thing for me isit's it's kind of nice to hear
that the the confidence in themarket, but without it being
perhaps uh overcooked or youknow uh you made the point about
you know looking back to theleading up to the GFC and those
times where you know the m moneywas flowing and you know,
(43:21):
probably people farmers took a abit bigger leap into you know
get getting uh over-leveragedand deregulated market.
Yeah, that's right.
And it's so it's kind of nice tohear that that's I guess some
lessons coming through from thatand a little bit of um I guess
maturity.
Uh measured approach to theopportunity.
So so a good measured sort ofconfident but not overconfident.
(43:42):
Yeah.
SPEAKER_02 (43:44):
I do probably have to put the uh the caveat in
there that I'm in uh we're inthe business of making sure our
vendors get every last dollar.
We we value competitive tension.
So um I wouldn't want to thinkthat we've gone to sleep.
And but I think at the end ofthe day, uh willing buyer,
willing seller is the ultimatetest.
SPEAKER_03 (44:02):
Yeah, right.
100%.
Conrad, thank you very much.
And I think it would be good tocatch up down the down the line
and see where some of thesethoughts went and where the
market's actually played out.
So we would uh would like tocome back at some stage.
SPEAKER_02 (44:14):
Yeah, always good, and always good to get there'll
be other opinions uh differentthan mine, and that's good too.
Yeah, just thanks, Wade.
G'day, and welcome to Feed for Thought, a regular
podcast from Pioneer, coveringeverything from farm systems to
crops and products and much,much more.
SPEAKER_03 (00:15):
Right-ho, welcome back to Feed for Thought.
My name is Matt Delhi, and asalways I've got Wade Bell with
me.
Welcome Wade.
G'day Matt, how are you?
Good thanks, and we're back inuh in the middle of two again.
I'm uh hosting you pretty well,I think.
Another fine day, finish day inthe middle of two.
SPEAKER_04 (00:30):
Yeah, I wouldn't call it stunning weather, mate,
but it's uh it's it's not bad.
SPEAKER_03 (00:34):
And we're in the CBD uh in uh Palmer North with
Conrad Wilkshire from PropertyBrokers.
Welcome, Conrad.
Thank you, Matt, and uh welcomeWade.
Cheers.
This is uh a great little setupyou guys have got here at
Property Brokers in in townhere.
SPEAKER_02 (00:47):
Yeah, this is our head office, and yeah, we're
very proud to be here and it'suh served us well.
We've been here uh we'll be 40years next year.
So you know it's it's been HQfor a long time and it's um
probably known more as as asupport center these days, um uh
because where our network goesliterally from Fongaray down to
Cargo.
So it's uh it's a bit differentfrom where we were 40 years ago
(01:09):
with a little cottage and abouteight people in it.
Yeah.
SPEAKER_04 (01:11):
Do you do you want to just uh expand on the history
a little bit more on on PropertyBro?
Because it's quite aninteresting story.
SPEAKER_02 (01:17):
Yeah, it is.
It's one of the reasons I joinedit eight years ago, actually, is
it's a family-owned business.
Um and it was the founder was uhTim Morton, and he's still very
involved in the country today asthe chairman.
And his son um Guy Morton nowruns as managing director.
But you know, it's it was basedon a philosophy of a handshake
and your words you bond, quitetraditional values.
(01:38):
I mean, Tim went to Lincoln andhas got a strong farming
background himself, uh thoughhe's built a huge business
that's um you know covers allfacets of real estate.
And um, those sort of ethics umhave served him really well.
And so they set out a strategyto be really strong, uh,
initially in the Lower NorthIsland and very provincially
based.
And then as as the business grewand and off the back of the
(02:01):
relationship he built over along time, and a lot of other
businesses sort of put theirhand up to say, Oh, we'd like to
work with the brand, like to uhmaybe build bring bring our
story alongside yours.
And so, you know, all of asudden um we had a much bigger
footprint, uh, including theSouth Island.
And then uh uh the farmland's uhmerger came along in about 2000
November 2019.
We put that business uh togetheralongside ours, and that gave us
(02:24):
a much stronger footprint up anddown the country as well.
And then other businesses joinedus off the back of that.
So it's there's been someacquisitions in there, but I'd
have to say it's most of it'sbeen relationships and organic
growth.
And and and most importantly, isholding good the good people
that have come alongside.
It's all very well.
Um, you see this a lot withbusinesses that grow.
You you put a lot of you putbusinesses together, don't
(02:46):
always keep the the actualessence of what that business
was in the first place.
And we've been able to achievethat.
Uh I know from my perspective,I've been involved with the
rural business over this lasteight years.
It's um been really great to seeuh people come into the business
and also the people that helpset it up uh in combination.
We've gone from about sixpercent share of that raw market
(03:06):
to about uh 26%.
So we're we're proud of that inthe sense that it's you know
we've uh been able to servethose clients well and and the
the team that supports them havebeen able to grow through their
businesses uh very successfullytoo.
SPEAKER_04 (03:18):
Yeah, yeah.
And all regionally based,largely you you you seem to be
out of the main centres in theregions?
SPEAKER_02 (03:24):
I I think you know, Tim's always trying to keep it
pretty simple.
He he always felt that there'sunlikely to be a strategic plan
to take over White Booker orFielding or Parto or Ashburton.
And um, you know, at the end ofthe day, uh from you know any
sort of big corporate play in inin the CBDs, because we we
aren't in Auckland or Hamiltonor Wellington or Christchurch,
(03:47):
we are in the provinces.
And I suppose we'd say, youknow, if one can get information
on there, our roots go deeper asfar as the provinces go.
We uh we're sort of centred inserving rural communities and
playing our part in ruralcommunities.
And off the back of that, weseem to do a lot of business
because particularly inprovincial New Zealand,
relationships really do count.
And um you don't get away withmuch in a small community.
(04:08):
You you either front up or youdon't, there's not a lot of
clarifying.
I don't seem too much halfway inthere.
SPEAKER_03 (04:14):
Yeah, yeah.
And we might pick up a bit ofthat business and a bit of a bit
around the dynamics goingforward.
But um before we do, just alittle bit about your background
because you haven't always beenin the real estate game.
SPEAKER_02 (04:25):
No, there's probably three legs to my career.
Um, well, actually, well, if Istart from the very beginning, I
grew up in Hawks Bay and trainedas a farm cadet on Smedley
Station, which I have a bit todo with now.
We can touch on that a bit lateron if you like.
But um they gave me ascholarship to go to Mercy and
studied agriculture and then didbusiness studies, and off the
back of that, uh took anopportunity in finance with the
(04:46):
Royal Banking Corporation in thelate 80s, which was a very, very
uh different environment.
And um, I was off the back ofall the reforms.
So um had a wonderful trainingopportunity there, and that set
up my banking career, and Ijoined the BNZ.
And so I had uh I was almost 20years out of banking, but the
first you know, big chapter ofmy career was agri-banking, and
I was sort of GM agri for BNZwhen I uh finished up there in
(05:08):
2006.
Uh so that was agri-banking anda little bit offshore stuff, and
then um back to um went there,went farming on our own account
at that stage, and then took anopportunity after a couple of
droughts, it became uh anopportunity came knocking around
um maybe joining um FMG.
And um so I joined FMG and hadalmost nine years there and
(05:30):
ended up uh chief operationsofficer there.
So, and so sort of uh farminsurance and and personal
insurance and actually having alook at how we actually support
our farming community.
And we um had a you know, wewere really challenged through
that period with earthquakes andstorms and the like, so much uh
like we've had in the last weekwith 10 10 days of solid wind.
(05:52):
So um, so that that's thatformed a lot of my career.
And then um in 2017 I joinedproperty brokers and we've had a
had I've had eight years there.
So I suppose you'd sum it up asagrifinance, agri-insurance, and
now uh agri real estate.
SPEAKER_04 (06:06):
Yeah, but but all sort of sales-based
relationships, not roles.
SPEAKER_02 (06:09):
Very much business development, helping um, if you
like, build um teams and workingthrough those teams, um, you
know, helping the marketdevelopment and making sure that
I think I've been very fortunatein my career.
I've had a huge passion forfarming, but I've been able to
serve farming through uhbringing specialist support
alongside farmers.
And I've always always felt thatspecialist teams can do uh
(06:30):
specialist agri teams can do somuch more for agriculents.
When I joined our the bankingsector, I mean most of the uh
the training banks had verylittle limited farming
background or capability tosupport farmers.
And um, so we, you know, we werethrough at the time there was
only three agri specialists inthe Benz when I joined.
Yeah.
So, you know, it's uh we wereable to help shape and change a
(06:53):
lot of the policies thatsupported farmers.
And that was and similarly withFMG, it had a tremendous story
about it.
Uh it goes back well over 110plus years.
Uh, but you know, it probablyhad never had had a rural
graduate recruitment program orhad any deliberate strategy to
connect with those ruralcommunities in a in a sort of a
in the modern era.
Yeah.
And um, so we were able to help,you know, through a really good
(07:16):
team, um reframe all that.
And um the property the propertyside here is we've always had
wonderful relationships withfarmers, um, but actually the
ability to operate nationallyand leverage our capability for
the benefit of farmers and getcapital flowing between the
islands and build those networksup.
That's that's been the realchallenge, and it's been a we've
been able to achieve that, andit's been quite exciting.
SPEAKER_03 (07:37):
Yeah.
You've talked aboutrelationships, but how have the
deals, I mean you've been in theagri in the business, the
banking, sorry, um, insurance,but how have the the deals
almost changed?
Is there been a I mean you'vegot drones taking all this
wonderful footage out there now,but and is there other tools
that the team is using?
SPEAKER_02 (07:57):
Oh drones is a good one because uh a couple of them
have gone missing in the lastweek.
So doesn't pay to put them up.
SPEAKER_03 (08:06):
Wade knows because his flight was a bit uh dodgy as
well.
SPEAKER_04 (08:09):
But I can imagine that in Palmers the North, to be
fair.
Putting a drone up would be a uhtricky exercise.
SPEAKER_02 (08:14):
I think um I look back at the days I had in my
banking career and they weregreat days because there was a
uh the level of regulation andcompliance was completely
different, and we were able tooperate um, you know, with our
clients and have quite a lot ofautonomy.
Um whereas today the regulationframeworks everybody has to
operate under, and farming's noexception.
(08:35):
You think about the billions ofdollars that have gone into
compliance for sustainablefarming.
So the world's changed, I think,in in my career significantly.
Uh, and saying that one thingI'd say is common to um today as
it was uh 30 years ago, um, isthat uh relationships are still
central to agribusiness.
(08:55):
And um you've got to usetechnology to to serve it well.
Um you know, um my son's outworking on a station in Hawke's
Bay and he's out on a horse, buthe also uses a drone.
Yeah.
Uh so that's on the side saddlethere if he needs it to save um
double working the dogs andactually making sure exactly
where the cattle are before wego that way.
(09:15):
So I think it's no different forus.
We've got drones and technology,but equally we're still um it's
an enabler to be able to executewell, maintain really good
standards in terms of marketingand the collateral that supports
the farm campaign.
But ultimately you still have tohave the confidence of the
vendor and the and the and theright team around you to get the
job done.
Yeah, so almost like therelationship stuff is the
(09:37):
foundation all of that stuff isjust But you g you can't ignore
uh the you know, we spend well,we're on a podcast right now.
We never would have entertainedthat idea in the past.
And word of mouth was probablythe the big guy.
Yeah.
So, you know, we are you know,we're in a technology-enabled
world, so um the moment we thinkwe can step us uh out from that
(09:58):
and not have uh a part in that,then I think we're on a slippery
slope.
SPEAKER_03 (10:01):
Yeah.
The rural market's been uhpretty dynamic of late, and it's
uh is definitely different towhat it was 12 months ago.
It's a fast-moving beast at themoment.
Could you give us a bit of a awrap on where we're at at the
moment?
SPEAKER_02 (10:15):
I I actually think this this calendar year has been
a real sea change in rural realestate.
Uh and it was recoveringsomewhat and through towards
calendar, you know, uh toDecember 24th.
But if if I have a look at thesales data, it is uh the
successive months from Januarythrough to now, where you're
(10:35):
seeing month on month, comparedto the same time last year, a
significant shift in sales.
So everybody talks about what'sgoing to happen this season and
a reset.
But actually, the reset hasactually happened.
And uh just to give a context tothat, we're we're now seeing
monthly sales consistently allcalendar year, now in line with
(10:56):
the 10-year median for thenumber of farms sold in that
month.
Now, so not only and to give acontext, the last two years have
been some of the hardest goingyears for farmers.
And even the dairy guys werehaving on-farm inflation and
whatever, you know, the returnswere solid.
But the high interest rates uhwere having a real impact on
farming.
(11:16):
And uh and the commodity cyclefor the sheep beef sector
certainly wasn't as strong aswhat it is right now.
So if I look at um, you know,the governance role I am
involved with the station at themoment, we we we were tossing up
whether we were budgeting thistime last year, tossing up
whether we're budging$6.50 forlamb, and it was nothing like
the cattle for, and we'relooking at deferring fertilizer,
(11:36):
and we had pretty honestinterest rates that we had yet
to reset.
All that's changed dramatically.
And I and I believe that we werevery typical of a lot of farming
situations.
So the there's been in the dairynow have had uh heading into
their third good year in a row,and that's and the Fonterra
story continues to consolidate.
(11:57):
So that's but a lot of that hasbeen uh well telegraphed.
So the the market today isoperating at levels already,
this is before the season reallyuh firms up, at or around the
10-year average.
Wow.
The last 10 years though hasbeen very tough for uh farming,
um, and there's been a lot ofvolatility, and and you've seen
(12:19):
um you haven't seen the sort ofuh particularly from the dairy
point of view, anything like thecapital growth yet.
And so that's so again, I Iwould say that the the alignment
with the 10-year averageprobably isn't where I see the
market going over the next fiveyears.
Yep.
Because this last 10 years hasbeen, if you think about what's
(12:40):
beset farming and what farming'shad to weather and the
investment in weather, uh notjust in terms of the physical
weather, but just in terms ofall the environmental settings,
all the policy settings,interest rates, what have you.
It has been or or even access tocapital, because there was a
period in 2019 where finance hadnever been cheaper, uh, but the
it was just very difficult forfarmers to be able to access it
(13:02):
because of all the uh regulatorysettings with Credit Credit
Credit Contracts Act, etc.
etc.
So these and and reserve banksettings on you know pricing for
farm debt.
So you you've had all of that toplay through.
So this and yeah, if we usedairy as a case study, it has
its contribution to GDP orexports, its contribution to
(13:23):
exports has is literally doubledand without any additional milk.
And and I think you that'sthat's really significant
because you've you've had um youknow hardly a kilogram more milk
solids in 10 years, but it'sgone from probably 16 billion of
contribution to the economy tocloser to what 29 billion on the
current forecast, and it's gonnabreak 30 anytime soon.
(13:46):
So, and and Frontera itself isin good heart.
So that's uh these are thingsthat I've discussed elsewhere.
And that look, I I just think umthat farmers aren't gonna lose
sight of all the hard-foughtlessons of the last 10 years,
but I think it's not thebenchmark from which decisions
will be made.
I think the Ford outlook is alot stronger, and you've seen
some fundamental settings aroundmethane and others that probably
(14:09):
have really shaped or limitedthe confidence farmers would
have to take.
Because when you when you buy aproperty, um, you're looking at
the next five to ten years inmind.
SPEAKER_05 (14:19):
Yeah.
SPEAKER_02 (14:19):
And you're trying to, you're trying to look
through the here and now andactually try and figure out
actually, and for a lot offarmers, the safest bet was to
do nothing because there wasjust so much uncertainty.
And even those that are wellcapitalized were saying, Well,
you know, I don't know.
I've, you know, Joe, my bestmate down the road had a crack
and it hasn't served himparticularly well in the last
five years.
Uh whereas that's I think goingto change.
SPEAKER_03 (14:41):
So is that aspect of particularly for dairy.
Yeah.
So is the aspect of people thathave held back probably for the
last couple of years of puttingtheir properties on the market.
And then we've also got thesebusinesses that have been kind
of prepp, ready to go and andlaunch and just waiting to find
the perfect time, and that'swhere we're at right now.
SPEAKER_02 (14:58):
Yeah, I think there's definitely there's
definitely, I think, a a backlogof assets coming forward.
But I don't believe the buyersare going to be paying excessive
premiums because of everythingwe've just been chatting
chatting about.
What I do uh believe though,there's going to be a lot more
liquidity in the market.
You're you're gonna have willingbuyers and you're gonna have
(15:19):
willing sellers.
Um we had we've had willingsellers, but there just hasn't
been the we you know, we'd havefield days and there would be
you know hardly anybody turn up.
Even the bank manager wouldhardly turn up.
Uh whereas that's particularlyin the last couple of years.
And they were great assets.
Now we've got we've we've hadassets down in you know centr in
Central North Ireland, which isnot exactly on the doorstep of
(15:42):
anywhere.
And we've had you know 30 pluspeople turn up.
Yeah.
So, you know, I think andquality assets coming to the
market that have been uh wherethere's been good stewardship
and it's they've farmed to goodpractices and standards.
Well, I think there's everyconfidence we we can find demand
for that.
And uh importantly, there'scredit appetite um to have a
(16:03):
look at uh have a look at that.
SPEAKER_04 (16:05):
So so to kind of summarize that up, so there's
there's confidence there, butperhaps uh not not
overconfidence, theoverconfidence being the some of
the lessons learnt um fromprevious decades, uh if you
like, around sort ofover-leveraging or well, I think
you know there was a lot ofpre-GFC.
SPEAKER_02 (16:21):
You know, we gotta remember the GFC was not uh a
normal event, and and that andthat what the repercussions of
that have took uh a very longtime to wash through.
And then neither was COVID.
So these things are actually uhsignificant events in their own
right.
Uh so people are now wary ofglobal type scenarios and the
(16:42):
impact it can have.
And then equally, yeah, thecompliance and things.
So I think people are just goingto be a bit more measured than
in the past.
You know, if you think about umthe deregulation that went
through from the, you know, howregulated we were in the 70s to
how deregulated we were in the80s.
There was a a period where ifyou sat still, you just got left
(17:02):
behind.
And so I don't believe thatthose investment decisions were
just blind faith.
I mean, you you just look backover a decade and a half, and if
you'd sat out of it, you'd missyou'd miss the boat entirely.
SPEAKER_01 (17:13):
Yeah.
SPEAKER_02 (17:14):
In fact, you know, in my banking career, my my team
was forever being um chastisedfor not having being braver with
credit because uh I can rememberthose, some of those.
Yeah, because you know, we'rewe'd we'd fail to support a
decision and you know they'veprobably gone up a million
dollars in the preceding 12months.
(17:34):
So um so what I'd say is that weare in this period now where
people are, I think, uh a bitwiser and and have the benefit
to make that.
Now, if you've got a premiumblock not too big in scale on
the town boundary on top ofalluvial soils, I think you're
still gonna see some and and theand the neighbour's well
(17:55):
capitalized.
Uh you're still gonna see uh abias there.
But if you're talking uh, youknow, you're uh 45 minutes to an
hour out of town and you've gotsome good soils and it's and
it's off reasonable scale,people are gonna be looking at
what it returns.
Yeah.
And then obviously they'll beinvesting on the strength that
they believe that the underlyingasset will grow in value.
SPEAKER_01 (18:13):
Yeah.
SPEAKER_02 (18:13):
Because I I think uh farmers are not naive.
No, nobody would buy aninvestment where they can't
think they can get out of it.
You need to be confident thatactually there's some liquidity
in the asset you've got so thatif you have a change in
circumstance or a change inhealth or whatever the scenario
might be, that you can actuallyexit the asset as well as invest
(18:33):
in it.
And so I think we're actually inthat phase now, and I think
you're gonna see more confidencewith people prepared to operate.
Uh, but I don't think you'regonna see this um capital gain
level of people doubling up thevalue of their assets.
Yeah, even so the best exampleof that would be um the sheep
and beef sector, uh, whereyou've seen the golden ticket
(18:54):
outcome with the billion trees,and people forget that Shane
James was actually the architectof all that.
It is that, and he's stillfilling up all the country halls
and entertaining us all.
Uh and you know, he he's uhbrought a lot, I think, to um to
to politics in the last uh 18months, particularly.
(19:14):
But I think I think we, youknow, that that tree strategy uh
was basically unregulated uhwith open ticket overseas
investment scenarios.
And so you but even with allthat, you do and we certainly
send a lot of land convert totrees, but if you actually have
a look at the number of farmssold, it it it could have been a
(19:36):
lot, lot more.
Um because actually farmers werestill uh committed to the
farming future.
So it's the key point there, Ithink, is that the capital gain
we had was significant.
Yeah.
Uh but it wasn't, it was built,it wasn't built around farming
and people could see throughthat.
SPEAKER_03 (19:53):
Yeah.
And that kind of land usechange.
I mean, the next you know, 24months is it doesn't seem like
there's gonna be a lot of that.
We might have some versions andstuff down, dairy conversions
down south.
But do you feel it's gonna bemore um family businesses
growing or someone taking abigger step versus going in and
(20:13):
making a wholesale change to thesystem?
SPEAKER_02 (20:16):
Yeah, probably unpack that two parts.
One, family, and then maybe talkabout the the uh corporate
activity in a large scale,because I think corporate
activity gets a lot of air time,but actually it's the family
businesses that drive ourbusiness.
Yeah, and the corporate activityis significant in its own right,
but it is the the day-to-dayfamily businesses that support I
(20:38):
think support our primary sectormore than people perceive.
SPEAKER_05 (20:40):
Yeah.
SPEAKER_02 (20:41):
But if you have a look at what drives sheep and
beef valuations, uh you had thisunregulated natural capital
carbon story and you had noregulation around uh the the
conversion of pasture to treesor where those trees were
actually being planted.
(21:02):
You know, there was all thisrhetoric around right tree,
right place.
But essentially, uh you want toput trees on the best country
you can if you're into trees.
SPEAKER_04 (21:10):
It's easy easy to get access to.
SPEAKER_02 (21:12):
Yeah, because of the extraction costs on use land use
seven uh are significant to theextent when you look at the
overseas investment office andyou look at the decisions that
were made on um overseasinvestment decisions, they were
all land use six, very, verylittle land use seven.
Um yet everybody bundles wholecountry into the same land use.
Well, people buying trees don'tthey they've they've been very
(21:32):
astute where they've beenbuying.
They they want to buy the bestclass of land they can to grow
trees as close to a port as theycan.
So that that led to a lot of uhparticularly on the East Coast
and more latterly in Southland,has led to a lot of, you know,
some significant revaluations.
Um but that that has washedthrough the um and I think we
(21:54):
are now we've gone fromunregulated to regulated.
And that's quite a change.
Uh and people haven't reallyperceived that change because
we've had this moratorium whichallowed everybody to run for the
line under this moratorium thatwas there, that's essentially
closed for around ETSregistrations on pasture and
forestry.
But going forward, there's goingto be there's a much more
(22:16):
regulation as to where you'replanting.
And and also local governmentnow has a much stronger mandate
around what gets planted where.
And then you also have theoverseas investment office now
not offering sort of blanketapprovals and uh the fact
there's certain categories ofregions where that have been hit
with cyclones and like that.
They're they've actually sort ofearmarked as sort of no fly
(22:39):
zones.
Uh so for further, you know,automatic consents.
And you've got to remember thatunder that special forestry
test, you had something like 86decisions on the trot, but not
one declined, all in favour ofpasture to forestry conversion.
So you you just have to be alittle bit more circumspect and
say, well, that was uh hadnothing to do with farming.
It was a stroke of a pen.
(23:00):
Yeah.
You had this permanent forestry,which was just like
hyperinflation, where it didn'tmatter where the forestry was
being planted, you could accessall this carbon.
Um so that th those things havehave stepped back.
And then the carbon marketitself has has struggled a bit
uh to achieve some of its aims.
Uh, I think uh there's a lotmore discipline around that at
the moment, and I see everyexpectation the carbon price
(23:22):
will improve.
Um, but again, that market isbuilt on confidence, and you
actually um only have to listento Donald Trump as recentness
this morning talking about purecoal and how wonderful coal is.
Uh that one could have lose abit of confidence in the carbon
market when you start seeingthen uh um the world's biggest
(23:42):
leader sort of advocating asstrong as he can for everything
that he does.
So, you know, all I'd say isthat I think the ETS is here to
stay, I think it has a role toplay, but I think it's in a much
more, it's in a much moreregulated framework than it has
in the past.
SPEAKER_04 (23:55):
Yeah.
Yeah.
So it sounds like with that, youknow, some of that sort of if if
we'd put the the the ETS or orthe carbon market into that
compliance base kind of maturedor s or stabilized uh a little
bit.
Like you say a lot of that stuffis washing through, people are
getting more comf comfortable,maybe things are settling a
little bit.
SPEAKER_03 (24:15):
Environmentally.
SPEAKER_02 (24:16):
So yeah, and I think also um the revalu, I mean, on
the one hand, uh farmercommunity did not enjoy the
contesting of land, and a lot offarmers were coming as farmers
were coming as underbidders ongood partial country and you
know, some really good countrythat got converted in trees,
which you know, really put somebig challenges in some rural
communities that I'm reallyclose to.
(24:37):
So there's there's no questionabout the impact, and that has
played out, and that's butequally it had a huge impact on
the revaluations of all hillcountry.
So on the one hand, you were youwere literally we saw the
doubling of and then in this,you know, I can think of country
not far from here, which was wecould struggle to get four and a
(24:57):
half thousand hectare, was goingfor thirteen thousand a hectare.
Um so that that that was sobasically the the cheap land got
very expensive.
Yeah.
And and that made the expensive,what was historically expensive
land look very cheap because youcould actually literally walk
out of your hook country blockand go and buy something flat or
yeah, much closer to town.
SPEAKER_04 (25:16):
Yeah.
SPEAKER_02 (25:17):
So it hasn't all been bad, but however, it has
been very um challenging.
And and I think what we'reseeing is uh some of those
evaluation hype has rolled out,and we're now seeing land in
hill country actually at um morethe long-term fundamental
values.
And and and I think farmersthemselves now are are probably
a little bit more in tune withwhat they might do with their
(25:39):
land use and some of themactually taking advantage of
some of the policy settingsthemselves to actually get
access to some of those carbonstorage if they want it, which
actually has proved to be veryhelpful for some of those farms.
Whereas I think for thosefarmers that actually look at
their land use and actually workout what their stocking rates
are and where their money iscoming from, it it could well be
those that actually retire 20%of their farm maybe end up
(26:02):
buying the s the station nextdoor versus those that just
simply play to the lamb schedulemay find it harder to compete
with those that have gotdiversified income.
SPEAKER_03 (26:11):
Let's um roll down off the hills and into the flats
because the arable sector's uhin a different space, I suppose.
And it's one that we're probablyplaying closely with as well.
When we think about down south,there's a bit of change down
there.
How do you see that playing out?
SPEAKER_02 (26:26):
Well, yeah, it's the arable sector's hard um because
you've got such great soils, andbut you're up against well, you
guys know more about this than Ido, but you're up against
Australia, which obviously youknow through your your parent
company, et cetera.
They're we're just we're justnot a strong, it's we're just
(26:47):
not a strong forceinternationally, so we are very
you know exposed there.
And the domestic market justisn't strong enough.
And then you've also had um thestock feed business go under a
lot of pressure because there'sbeen a lot of change there as
well.
So even even some of the safeoptions aren't that easy anymore
because actually um you've hadfarm systems probably step back
(27:09):
a bit from the real intensivefarm systems to sort of more
middle ground, and that you knowthere just hasn't been that
demand for maize, maybe the wayit was in the past.
I mean, you guys are theexperts.
SPEAKER_03 (27:20):
We just thought we'd get your opinion.
But yeah, dead right, ships canjust effectively come in and and
change those markets.
Yeah, like I say, down in thatCanary region, we're seeing a a
definite impact, and maybethat's why we're starting to see
a bit of interest in in thedairy.
SPEAKER_02 (27:35):
Yeah, I think even harder too was um uh those
compliance legislativerequirements, national policy
state national policystatements, uh limited land use
like grazing.
Where because of that, you hadgrazing properties that had
grandparented um dairy supportas part of their farm system, uh
(27:55):
selling for more than animproved dairy farm um not so
long ago, yeah, three or fouryears ago, which well, three
years ago.
And so that that didn't make alot of sense.
So, I mean, for those arablefarmers that were wanting to
maybe diversify into some dairysupport or any other kind of
land use, it was very hard to dothat.
And I think it's not just aboutmaybe putting more cow sheds in
place, it's just having a lookat that.
(28:17):
And of course, many of them haveinvested significantly in the
water schemes there as well.
So that that's sort of brought aits own headwind of um, you
know, the a baked-in cost thatneeds to be recovered.
SPEAKER_03 (28:28):
Yeah.
unknown (28:29):
Yeah.
SPEAKER_04 (28:29):
And just just looping around, I guess picking
up on some of that, I guess,South Island market, but in
terms of the rural market as awhole, what's kind of leading
the charge, if you like, at themoment, uh, when you kind of
think about you, you know,there's a lot of positivity,
there's a lot of confidencegoing on, you know, and and we
hear a lot about dairy, but uhis it dairy that's kind of
(28:49):
leading leading the way in thatrural sales market, or is it,
you know, where where's it at atthe moment and how do you see
that playing out over the next12 months?
SPEAKER_02 (28:58):
Wait, I I'd have to say it's across the board.
Yeah.
But dairy would be leading thatuh at this at this time,
particularly in the big end oftown in terms of the large
transactions.
So, yeah, so I think it'sdefinitely confidence across the
board.
I think if you look at it from asheep and beef perspective, it's
(29:18):
it the the the the changes we'reseeing, the improvements we're
seeing, most of them haven't hada full balance sheet year of
that benefit to actually lookback on.
Uh the the change happened, uhprobably the most of that change
really impacted this calendaryear.
Uh, the interest rate resetshave only just really started to
take effect.
And the cattle prices, you know,we're truck and trailer unit is
(29:42):
now well over 100,000.
That hasn't been part ofanybody's thinking for and I
mean the lamb schedule at themoment, and again, setting new
benchmarks.
So we we haven't seen that playthrough.
And then speaking from an exchicbeef farmer perspective, where
we used to finish about 5,000lambs, I mean, which is small
scale for many of the operationsthese days.
Is that you know, I think whatthey need to see is uh two or
(30:04):
three years in a row.
Yeah.
Um, which, you know, um nottaking weather or anything else
into the but just actually someconsistency for the chicken beef
guys.
And particularly I I do comeback to what sets a property
market.
So many so often people assumethat the confidence in the
farming sector that's will driveinvestment decisions.
(30:25):
Well that's true to a point, butthe biggest influences we have
found in terms of what drive themarket uh government stroke of
the pen type decisions that alsoall of a sudden open up
opportunities that just havebeen manufactured out of thin
air, and then or interest ratesand supporting credit appetite.
(30:46):
So if you can access credit atan affordable level and you have
banking support to access thecredit on you know reasonable
grounds, well then you've you'vegot a market.
Uh because you can have a lot ofpositive sentiment, you can be
doing a lot of things in yourbusiness, but if you can't
access capital at an affordablelevel and and um beat the cost
of capital, then you you'rereally you're struggling.
(31:08):
Because what why would you whywould you borrow at seven or
eight percent and be making afive percent return?
Or should be sometimes fivepercent would actually be a good
year.
SPEAKER_04 (31:17):
Yeah, yeah.
Yeah.
So to uh to expand on that uhthat question a little further,
so then who are the buyers outthere at the moment?
You know, is it is it the theneighbour or the you know the
existing land holders, or is itare we getting a lot of uh
foreign investment or whatwhat's the kind of the mix at
the moment, if you like?
SPEAKER_02 (31:35):
We haven't I'll come back to foreign investment.
We haven't had foreigninvestment operate in this
market since 2017.
SPEAKER_04 (31:40):
Yeah.
SPEAKER_02 (31:40):
We've had our first dairy to dairy decision with uh
direct foreign investment um inthe almost yeah, uh this just
this last month just gone.
So um it's so it's definitelyvery much onshore.
Yep.
Um and it is it is familybusinesses in the main uh uh
driving these investmentdecisions.
(32:01):
If you take the forestry out ofit and for sheep beef, it's uh
they are for family businessesgrowing.
If we look at uh that trend,that's the case with dairy um in
the South Island.
What we are seeing is uh what Icall uh agri corporate activity
is driving, you know, when youwe're seeing some of the largest
(32:22):
transactions we've seen in ourcareers ever.
Uh and and it's uh the pricesper hectare are are firm, but
they're not they're not over thetop.
But the scale of them, we've youknow, you're looking at$30,$40
million type transactions withone traction transaction on the
go at the moment, which would uhdwarf those numbers.
(32:42):
Um so if it was to complete.
So, you know, there's there'sthere's just lots, uh, lots on
the go.
Yeah.
So, you know, the business, youknow, there's this there's um
there's a number of businessesout there that actually have um
corporate agri that has workedextremely hard on managing their
balance sheet risk, havecomplied with any of the bank
(33:05):
commitments, have built a verygood track record in the market
with their business models, andthey are ready to to go.
So, and they operate at scale.
So that that is an influence.
But I think we'd be naive tothink that actually there aren't
a lot of really successfulfamily businesses.
If you take Canterbury with youknow over a million cows,
there's uh a hell of a actuallyjust really well structured
(33:27):
family businesses who've who'veum fought pretty hard to keep
their businesses exactly wherethey need it to be and are
taking advantage of it now.
And and I'd almost say some ofthe sterry impact we're seeing
at the moment is probably thatclassic saying that overnight
success takes about 10 years.
Yeah.
SPEAKER_03 (33:46):
I think that was Peter Alexander who quote the
source.
What about on the other end ofthe scale then?
So those looking to get intofarm ownership, are we seeing
any of that?
Uh yeah, it's I mean, you'reclose with that there and you
know, with your connection withSmedley, uh with people coming
through the system.
SPEAKER_02 (34:03):
Yeah.
Um Matt, I'd say in the whilethe the it's been kind of the
toughest real estate outlook umover, you know, if I look back
at uh uh 23 and 24 in terms ofthose calendar years, we
probably put more people intotheir first farm uh than we had
(34:24):
in a long time.
Because some of the people onthose, particularly if I think
about dairy for a moment, umthey the in those remoter areas
operating at scale, trying toget people to shift to remoter
areas.
And if I outline them, they'llget my local agents.
You'll get shot.
My local agents will ask me whatI was doing on this podcast.
(34:46):
But you know, the it was the uhincumbent contract milker who'd
worked there for five years,owned all the stock freehold,
knew the business intimately,had a great track record with
their local bank, but they justdidn't, and they had, you know,
probably seven-figure equity,but they didn't have the three
million large to probablycomplete the deal.
But the vendor also has oftenbeen there since, you know, the
(35:10):
early 2000s, uh, were was in theposition to actually say, well,
actually, um, okay, well, youbuy this title and you can lease
the other.
SPEAKER_04 (35:20):
Yeah.
And then to finance WN.
SPEAKER_02 (35:22):
Yeah.
And and there was a lease tobuy.
And I can tell you thosedecisions that were made, I
think they're gonna look backand say, well, actually, that
was a game changer.
Yeah.
Because there's no way thosevaluations are going south.
And you could say there's riskin that, yes, but there's risk
in anything.
But actually, how much risk?
Because they're they're theincumbents, they've been farming
there for quite a while.
They had a great relationshipwith the owner.
(35:43):
And if you're gonna take a riskon any scenario, sometimes it's
the person you know, then takinga bet on the outsider.
So we so there's thosescenarios, but then there's also
some, you know, I'm aware ofsome really quite large
transactions down south withsome really good young, you were
talking about earlier on thesome go-getters out there.
Well, there were some wonderfulgo-getters where we actually
introduced brand new parties,got them around the table, got
(36:04):
their bankers and theiraccountants around the table,
and we actually got transactionstogether and completed six or
seven million dollar type farmtransactions with their first
farm.
SPEAKER_04 (36:12):
Yeah, nice.
SPEAKER_02 (36:13):
So, you know, those things are, and we've been
running a series, we ran onelast week, called Footprint Into
Land.
And a lot a lot of our lot ofour work goes into helping
people see past their immediatefarm gate and maybe having
having a look at areas like, youknow, on the West Coast.
Um, you know, you know, theyalways say it rains at night.
That there they they've there'ssome wonderful farming for
(36:36):
opportunities there.
And we've been able to putpeople into properties over
there when you know was all thischat about Westland milk, they
went through a hugely toughtime.
But uh under Yeli, that it hasbeen a complete change.
And the the the balance sheetsof those farming businesses have
have performed extremely well,they've had good returns.
And so, you know, that land isvery affordable.
(36:57):
And um, for those who want tofarm, I think in my my banking
career, we we used to takepeople everywhere uh to get into
a farm.
Whereas now, if you're farmingin Dun Sandle, you know, um
yeah, we think Mayfield issomewhere that you know is is a
bit of a walk because everybodywants to stay in the area in
which they are.
And I think one of the thingsI'd say to to get ahead in
farming, many of the farmersthat I know now that are, you
(37:20):
know, closer to my age at thesort of knocking on the 60s
door, is that they they took alot of punts and they they
bought property in Northland andthen went to the Waikato, or
they went down Southland and,you know, and they've taken
their opportunities.
They took chances.
Yeah.
And I I can't see how that'schanged.
You're still going to take yourchances.
Yeah.
SPEAKER_04 (37:39):
Yeah.
Yeah.
SPEAKER_03 (37:41):
And then if we can dig into that Smedley piece,
because I know you're you'repassionate about uh those cadets
and and being one a former oneyourself, yeah.
And where that's led people.
SPEAKER_02 (37:51):
Yeah, 40 years ago, Matt.
Actually, 41 this is ever veryhonest about your age then,
yeah.
We don't get very many gueststhat are truly honest about
their age.
Uh you can get you can get awaywith a bit more as you get
older, I think.
Yeah, yeah.
So uh yeah, look, I I theopportunities in agriculture
today, compared to when Igraduated, um, I think are
(38:13):
unbelievable.
And, you know, um a farm managerwould have struggled to make
$25,000 a year uh back then.
And um, you know, I I think, youknow, if you uh if you wanted to
be a farm manager or alignyourself to these really good,
you know, great successfulgrowth businesses, and there's
just so many you can talk to inthe sheep and beef sector where
(38:34):
they are really growing verystrongly, and talent and key
people are the biggestinhibitors to growth, not access
to capital.
Um, I think the opportunitiesare great.
For those who want to buy theirown farm, uh, yes, sure, that
the these valuations aredaunting, but I don't remember
that anybody saying that when Iwas graduating um from Massie,
(38:55):
it was a sunset, agriculture wasa sunset industry.
And everybody's saying it's gotno show and we needed to be a
technology country.
So we still need to be atechnology company, but uh I
think agriculture is payingquite a few of the bills.
So, and that's you know, a longtime on now.
So I think for the young peoplecoming through, it is about
their work ethic, therelationships they build.
If they uh we we've we prideourselves on uh developing work
(39:18):
ready, uh really capablestockmen and stockmen and women.
Uh we've got uh equal number ofuh you know young women coming
forward these days, puttingtheir hand up for cadet chips.
And it's uh so that's so yourrole there now?
Oh sorry, yes, I I chair theHoward State Advisory Board,
which is uh a governance boardthat supports the public trust.
(39:40):
It has the custodial uhresponsibility for the station.
And we provide, I suppose, thatuh broader background to help
advise the public trust on youknow how how to work with and we
all typically the board has a astrong connection with the
station and and and and it'sbeen a great way to keep the
local community and invested inthat too.
And it's because it's it's it'sit's owned in trust, it's not
(40:03):
it's not it's not governmentowned.
So it's um so yeah, so we uhtake on 13 cadets a year, and
and well, we just interviewedour seniors and they're all
going, um, we need a f maybe afew more to think about
university as an option.
Because uh doing tertiary studydoesn't mean you don't go
farming, it's uh can just beanother enabler.
Um but also agribusiness careersare an option too.
(40:26):
But we do pride ourselves onactually um helping set an
attitude and a mindset aroundnot only just being a really
competent shepherd, but actuallysomebody that's actually can see
around the corner of the issuesand have a perspective and use
technology and all the otherthings that might come forward.
And I and I think that's the umthe wonderful thing about SMED.
(40:47):
It gives them it gives them uh Iwhat I look at their program,
we've got like a trainedpsychologist that um provides
you know really good thinking onuh how mindset tools and how to
and how to handle farmingbecause it's not all romantic
and it's there's a lot ofchallenges in farming.
So we give them really uh theythey like an accelerated
(41:08):
development program.
I mean, I look at some of thetraining that I've had in my
career and they are getting, youknow, really senior level
inputs, uh, supply chains,visiting, how how all the stock
selection works, rambreedingprograms, the whole nine yards.
And I know we've had goodmanagers through, and we've got
a new manager starting, um, GregCrombie, and he's been very
(41:28):
successful down in Mobile withLeafi Station and development of
that property.
So we we've got you know a greatrecipe there, but again, we've
had a real reset about ourbusiness model and what we need
to do.
And um, we're certainly notresting on our laurels in terms
of our history, we but we at theend of the day too, um, you've
still got to be able to uh bereally good with stock.
(41:50):
You've still got to be able towork with you've got to be able
to fence and do those thingsbecause if you if you want to
get your own farm, um paying fora lot of labour and getting
other people to do it isn't thatsuccessful.
I I remember in my bankingcareer, if you the candidate had
a trade behind them and had funsome formal training where
they'd had to live on not muchand had to make do and had to do
(42:13):
everything literally with thatnumber eight wire, uh, they were
always a good bet.
Versus if you have to paysomebody to do everything, it um
it can be a slippery slopepretty quickly.
SPEAKER_03 (42:22):
I'm I'm taking that option, but I don't have the
training in fencing.
So we'll drive past my.
Maybe while we're in the region,we could go and visit your
property and actually see whatyour skills are like there.
Yeah, let's look at the futurefor that, maybe.
Give me 10, 20 years, maybe.
But no.
Hey Conrad, that's beenfantastic.
Catch up.
Um I think relationship was abig piece at the start, is is a
(42:43):
that's a strong foundation ofany um property game and um
having successful uhinteractions there.
Um you had some real good quotesthroughout, and so and and
referenced your quotes as well,which is some sometimes uh a
miss.
But Wade, anything from you towrap?
SPEAKER_04 (42:59):
Uh probably uh yeah, no, I think you've largely got
it, mate.
I think the the thing for me isit's it's kind of nice to hear
that the the confidence in themarket, but without it being
perhaps uh overcooked or youknow uh you made the point about
you know looking back to theleading up to the GFC and those
times where you know the m moneywas flowing and you know,
(43:21):
probably people farmers took a abit bigger leap into you know
get getting uh over-leveragedand deregulated market.
Yeah, that's right.
And it's so it's kind of nice tohear that that's I guess some
lessons coming through from thatand a little bit of um I guess
maturity.
Uh measured approach to theopportunity.
So so a good measured sort ofconfident but not overconfident.
(43:42):
Yeah.
SPEAKER_02 (43:44):
I do probably have to put the uh the caveat in
there that I'm in uh we're inthe business of making sure our
vendors get every last dollar.
We we value competitive tension.
So um I wouldn't want to thinkthat we've gone to sleep.
And but I think at the end ofthe day, uh willing buyer,
willing seller is the ultimatetest.
SPEAKER_03 (44:02):
Yeah, right.
100%.
Conrad, thank you very much.
And I think it would be good tocatch up down the down the line
and see where some of thesethoughts went and where the
market's actually played out.
So we would uh would like tocome back at some stage.
SPEAKER_02 (44:14):
Yeah, always good, and always good to get there'll
be other opinions uh differentthan mine, and that's good too.
Yeah, just thanks, Wade.
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