Tuesday, 21 June 2016 07:55

Bankers’ warning for kiwifruit

Written by  Sudesh Kissun
ANZ's new managing director commercial and agri, Mark Hiddleston. ANZ's new managing director commercial and agri, Mark Hiddleston.

Major farming sector lender ANZ is closely watching the rising price of farmland.

ANZ's new managing director commercial and agri, Mark Hiddleston, says no one wants to see the boom in the kiwifruit industry turn into another 'bubble'.

He told Rural News at Fieldays that the kiwifruit industry rebound has been fantastic in "going through tough times and working together through them".

"The industry was literally holdings hands for a few years; now we see orchard prices are higher than before Psa," he says. "That's great, no one is criticising that outcome, but let's make sure it doesn't turn into another bubble."

Pre-Psa kiwifruit gold orchards were valued at $450,000/ha and green orchards $250,000/ha. Today, gold orchards are valued at $600,000/ha and green $400,000/ha.

Zespri has exported a record 50 million trays of gold kiwifruit this year, versus a record 30m trays before Psa.

Hiddleston and colleagues are talking to farmers nationwide about volatility and how they can manage for it. Ultimately volatility will discourage people from entering an industry and will discourage capital. "The more volatility, the greater the risk," he says.

Dairy farmers, now in their second year of negative cashflow, better understand this. "They realise they need to think about things they can control. You can't control what's happening in Europe, but you can control farm practices."

ANZ is noticing resilience among dairy farmers, Hiddleston says. Farmers who borrowed more money after the first year of the low milk price have since made radical changes to their businesses and now don't need additional funds.

They say to us 'we now have a better business'."

ANZ has made provision for bad debt arising out of the dairy downturn. However, it's coming off a low base and the board is "very comfortable" with current levels.

The bank is working with farmers as part of its 'agri reboot' programme on funding and monitoring onfarm costs for the year.

And ANZ is working with sharemilkers badly hit by two seasons of low payout, including coordinating discussion between sharemilkers and farm owners.

"We have clients on both sides; we don't want to put pressure on one side. The solution is not to push more debt on someone who really can't afford it and push them out of the industry.

"Instead we can facilitate discussion with landowners -- provide more support to landowners who then support the sharemilkers."

More like this

Low interest sustainability lending from Halter, banks

Dairy and beef farmers could be eligible for lower interest lending options for financing Halter on their farms, with ANZ, ASB and BNZ now offering a pathway to sustainability loans for New Zealand’s largest virtual fencing provider.

Featured

Let the games begin!

New Zealand's largest celebration of rural sports athletes and enthusiasts – New Zealand Rural Games - is back for its 10th edition, kicking off in Palmerston North from Thursday, March 6th to Sunday, March 9th, 2025.

The future of beef breeding

Progeny testing at Pāmu’s Kepler farm in Southland as part of Beef + Lamb New Zealand’s Informing New Zealand Beef programme is showing that the benefits of hybrid vigour could have a massive impact on the future of beef breeding.

Editorial: GMO furore

OPINION: Submissions on the Government's contentious Gene Technology Bill have closed.

Chilled cow cuts enter China

Alliance Group has secured greater access for chilled beef exports into China following approval of its Levin and Mataura plants to supply that market. With its first load of beef from Levin clearing Chinese customs in early January and a shipment from Mataura recently arriving in China, journalist Leo Argent talked to Alliance general manager safety and processing Wayne Shaw.

National

New CEO for Safer Farms

Safer Farms, the industry-led organisation dedicated to fostering a safer farming culture, has appointed Brett Barnham as its new chief…

Machinery & Products

AGCO and SDF join hands

Tractor and machinery manufacturer AGCO has signed a supply agreement with the European-based SDF Group, best known for its SAME,…

» Latest Print Issues Online

The Hound

Sacrificed?

OPINION: Henry Dimbleby, author of the UK's Food Strategy, recently told the BBC: "Meat production is about 85% of our…

Entitled much?

OPINION: For the last few weeks, we've witnessed a parade of complaints about New Zealand's school lunch program: 'It's arriving…

» Connect with Rural News

» eNewsletter

Subscribe to our weekly newsletter