Expanding farmers driving up WA wheat belt values
Fierce competition between cashed-up local farmers and corporate investors combined with a shortage of listings is driving a surge in farmland values in Western Australia’s wheat belt, amid a strong outlook for commodities such as wheat and lamb.
“There’s very strong buyer demand and limited properties available across the majority of the state, particularly in the cropping zones,” said Elders rural specialist Simon Cheetham.
According to Mr Cheetham – who secured one of the biggest farm transactions in Western Australia so far this year, the circa-$18 million sale of the 11,507-hectare Connawarrie aggregation near Mount Sheridan in the state’s south-east – prices are up more than 20 per cent up on the same time last year.
“The majority of the demand is coming from local growers,” he said.
“There is still strong corporate interest, but a lot of the farms are selling too quickly for the corporates to act.”
Connawarrie, a cropping and sheep aggregation developed and expanded over more than 50 years by retiring owners Ian and Lesla Chamberlain, came to market with an asking price of $17.85 million.
It was acquired by a West Australia-based corporate investor, whom Mr Cheetham declined to name. Settlement is expected in March.
Mr Cheetham said local farmers were in a strong financial position.
“There’s been a reasonable harvest, but it’s more the case of businesses that have grown over time and become pretty substantial in their own right that are keen to expand and take on more land,” Mr Cheetham said.
Low interest rates and the strong outlook for commodities like wheat and sheepmeat are also improving sentiment and firing up expansion plans.
In its 2021 Agribusiness Outlook Report, rural lender Rabobank said strong demand and supply constraints would spell good news for Australian wheat prices.
“Local wheat prices are holding up quite nicely despite the near-record crop [of 31.2 million tonnes forecast],” said Rabobank analyst Dennis Voznesenski.
Sheepmeat prices are also expected to remain strong, according to Rabobank.
Amid the strong outlook and buoyant market conditions, Mr Cheetham is taking another significant broadacre holding in Western Australia’s south-east to market on behalf of Australian Food and Farming.
The Melbourne-based fund manager has listed Minni Downs and Rockwater, a 7,559-hectare sheepmeat aggregation at Varley, not far from Connawarrie.
AFF acquired the property just 18 months ago, when it bought it from Peter and Lynette Gittos for $8.7 million.
Mr Cheetham, along with Elders colleague Ron Dewson, is marketing Minni Downs and Rockwater for sale or lease. Price expectations were significantly higher than the previous selling price, Mr Cheetham said.
According to its website, Australian Food and Farming is a cropping and sheepmeat producer that owns and operates agricultural assets in Western Australia. It operates the Key Advantage Lamb Fund and aims through regenerative farming to become “one of the largest and lowest-cost producers of branded sheep in Australia”.
Last year, AFF planted 3569 hectares of wheat and more than 900 hectares of barley, and ran more than 1500 Dorper ewes at the Rockwater aggregation.
Colliers International head of agribusiness Rawdon Briggs said hot markets in 2021 would include Western Australia, where he said “there is significant interstate interest in grain and value-add feedlot assets”.
