Mormons join $1.1b American push into 'undervalued' Aussie farmland
American investors have delivered a massive vote of confidence in Australia’s $84-billion agriculture sector, after spending $1.1 billion buying up two huge farming portfolios in NSW and Queensland.
The first deal involved the agricultural investment arm of the Utah-based Mormon Church, which has spent over $300 million to acquire around 26,000 hectares of cropping farmland in southern Queensland.
The acquisition of Worral Creek from retiring cotton growers Robert and Jennie Reardon was made by Alkira Farms, a subsidiary of the Mormon Church’s Farmland Reserve, which owns about 300,000 hectares of farmland in Nebraska, Oklahoma and Florida worth around $3 billion.
The Mormon Church – officially the Church of Jesus Christ of Latter-day Saints or LDS Church –has an investment portfolio worth US$265 billion ($391 billion).
Local agricultural asset manager Warakirri will manage Alkira Farms on behalf of the Mormon Church through a new cropping business called Solterra, led by investment director Adrian Goonan.
“Australian agriculture continues to be an attractive proposition for both domestic and global investors, providing genuine portfolio differentiation in a region that has a strong reputation globally,” Mr Goonan said.
“We are excited by the opportunities available in Australian agriculture and continue to see value from an investment in the sector that has the potential to drive strong returns into the future.”
The Worral Creek aggregation spans seven non-contiguous properties between Talwood and Mungindi in the Border Rivers region. The sale includes 65,900 megalitres of water entitlements. The property produces a diverse range of cereals and legumes, while also running a livestock breeding program and a feedlot.
“Worral Creek provides a turnkey large-scale enterprise, with exceptional irrigation infrastructure and water security, making it an ideal foundation asset for Alkira’s investment in Australian agriculture,” Mr Goonan said.
Bell family sells AFA for $780 million
In the larger of the two deals, NASDAQ-listed Agriculture & Natural Solutions Acquisition Corporation has acquired the Bell family’s Australian Food & Agriculture Company (AFA) in a deal valuing the Australian business at $780 million.
A new company – Agriculture & Natural Solutions Company (ANSC), which will own and operate the Australian business – is expected to list on the New York Stock Exchange or “another exchange [as] agreed”.
AFA, which farms across 222,000 hectares at Hay, Deniliquin and Coonamble in the NSW Riverina region, was established in 1993 by stockbroking legends Colin, Andrew and Lewis Bell – the founders of Bell Potter.
Its 14 properties farm 95,000 merino sheep, a 19,000-strong herd of beef cattle and 35,000 hectares of dryland and irrigated row crops that produce cotton, rice, wheat, barley, canola and other crops.
The business,put up for sale following the death of Colin Bell in 2022, has delivered average annual total returns of 16 per cent over the past 10 years.
ANSC intends to further enhance returns through the development of soil carbon and other biodiversity projects, as well as by developing premium products and other initiatives.
In a presentation document published online, ANSC highlighted the attractiveness of Australia’s agriculture sector, including its “innovative farmers with a commercial mindset”, “proximity to key export markets” and its “regulated carbon market”.
“We have always believed that agriculture – backed by the right sort of capital – could deliver nature and climate solutions,” said ANSC CEO Bert Glover.
Mr Glover founded Impact Ag Partners, which together with US asset management firm Riverstone established ANSC last year as a NASDAQ-listed special purpose acquisition company.
The Cayman Islands-incorporated company was set up to invest in agriculture as a means to tackle climate change through carbon sequestration.
In its presentation, ANSC asserted that Australian farmland is undervalued relative to North America and Europe and “offers attractive pricing to investors”.
