Sheep and beef equity farming - an opportunity

Abstract

Many New Zealand sheep and beef farmers are operating marginally viable farms. These people often justify remaining. In farming by quoting that farming is not so much for the money but the lifestyle. When the financial situation of theses farms is explored it concludes that after taking reasonable returns in real terms the farm is stagnant or slowly loosing ground. There is an opportunity however through equity farming to increase size. So long as care is taken through use of sound business practices to achieve top end performance the result is attractive. Equity farming would appeal to marginally viable farmers achieving good production results, or experienced farm managers wishing to take the next step. Equity farming on farms with scale is also attractive for investors. Returns equate around 5% - 6% coupled with an inflating land value making equity farming comparable with other investment. Rural investment is also attractive to overseas investors wanting a slice of New Zealand "paradise". Rural investment is also appealing to ex farmers keeping an active involvement in an industry they have spent so much of their life.