Posted by: Charles Stewart - Warrnambool

A new financial year – a new beginning

29th July 2019

July is always a great time to reflect and look forward to what lies ahead; rural real estate is no different! There has been plenty published about the tough times in the dairy industry, particularly in the drier areas of the state, and the subsequent exodus out of the industry.

Conversely, we have witnessed record prime lamb, mutton and wool prices with healthy cattle returns. Thankfully these strong red meat prices have to some degree assisted our neighbours in the north battle one of the driest drought periods on record.

One might ask how has the above scenario impacted on rural real estate in South West Victoria? We, too are witnessing an exodus out of dairying. Our office at Warrnambool sold 16 dairy farms last financial year, of which, only three will continue dairying, which means that about 80% of those farms sold will convert to beef and in some cases sheep. Where did the buyers come from? Of the 80% of farms sold for grazing purposes 60% of those were sold to district purchasers and 40% to buyers chasing grass and seasonal security; these purchasers came from the Wimmera/Mallee regions of Victoria, Riverina NSW, and the Riverland area and South East South Australia. With the lack of grazing properties on the market due to strong commodity prices, and the opposite occurring in the dairy sector, the land price differential in many cases has been marginal, hence the conversion of dairying to red meat.

During the recent school holidays our family went on a camping trip through Western NSW & QLD. If you are currently concerned about it getting a bit wet, I encourage you to go for a drive to witness the lack of water in most other areas. Little water in the Darling River at Louth, where the station sheared 8,000 sheep in May, normally 25,000. Traveling further north from there, creek and riverbeds are continually dry with little cattle and plenty of red dust. Another station we stayed on in the Thargomindah district of South West Queensland had 32 head left that were too weak to walk to the truck in January. Things did improve when we got into the Coopers Creek country in the Channel Country with the floodwaters from Northern Queensland still making their way to Lake Eyre; the recipe is simple JUST ADD WATER! This district was in full bloom.

The take home lesson from our adventures north was how lucky we are having high rainfall seasonal security. Since returning the phone has continued to ring, and as far away as Coonamble in Central Western NSW with graziers looking for grass.

Given the above economic and seasonal drivers, currently we are witnessing bullish opening milk prices, record lamb and mutton prices, with a beef price spike, THERE HAS NEVER BEEN A BETTER TIME TO SELL RURAL LAND! Demand is strong and if you are thinking about selling please contact one of our Rural Real Estate Specialists for further advice or visit us at Hamilton Sheepvention (site 403) from Sunday 4th of August until Tuesday 6th.

Kind regards,
Nick Adamson
Director, Licensed Estate Agent
Mobile : 0418 571 589
Email: [email protected]

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