Despite improved total returns from annual crop and livestock enterprises, the Australian Farmland Index dipped again in the first quarter of 2024.
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Overall income and capital value returns from investor grade farming operations in the broadacre grain, livestock and permanent horticulture crop sectors slipped to average 0.89 per cent below the results posted in the previous final three months of 2023.
Income was up by 0.8pc, but the $2.1 billion index portfolio's capital growth for the quarter ended in the red at minus 1.7pc.
However, the start of 2024 could have been worse if not for a bounce by the annual agricultural enterprises monitored in the index's parcel of 61 properties around Australia.
Average income from annual grain and grazing operations was up 2pc for the 12 months to March 31 and capital values also consolidated ground, lifting 5.7pc.
Riparian Capital Partners said grain and livestock enterprise returns tracked well ahead of the permanent cropping sector which suffered a further 6.9pc slump in average capital values and a 0.8pc fall in average income, ending the sector's total return at -7.7pc.
Riparian is one of the participating property investors whose data contributes to the index monitor.
While the near term returns have deflated, longer term annualised farmland index return results ended the March quarter at 10.86pc for the nine-year period the monitor has been operating.
Enterprise Income returns since March 2015 have averaged 5.1pc and capital growth at 5.57pc.
"The farmland index, overall, continues to show positive long term investment returns," Riparian Capital Partners noted in an official commentary issued by Hong Kong-based Asian Association for Investors in Non-Listed Real Estate Vehicles
ANREV monitors the quarterly income and valuation data submitted from the corporate-sized investment holdings.
Capital Partners noted the March quarter produced mixed opportunities for Australian agriculture with patchy summer rainfall conditions producing very much above average results in the north and centre, while key agricultural regions in the west and south were below average.
Strong pasture growth in many in key livestock regions was supported by improved cattle and sheep prices.
However, stubborn interest rates remained a key factor for the sector, although to date banks had been supportive of sensible debt positions.
Andrew Marshall
Andrew Marshall is the group agribusiness writer for ACM's state agricultural weeklies and websites. He is a former editor at The Land and has worked in various Rural Press group roles in Canberra, North Richmond (NSW) and Toowoomba (Qld).
Andrew Marshall is the group agribusiness writer for ACM's state agricultural weeklies and websites. He is a former editor at The Land and has worked in various Rural Press group roles in Canberra, North Richmond (NSW) and Toowoomba (Qld).
