30 March 2015 | Online since 2003



14 April 2014|Dairy,Finance,News

Australian dairy 'offers best risk returns in global agriculture'


Australian dairy currently offers the highest risk-adjusted return of any sector in global agriculture, according to Aquila Capital.

Surging global demand, especially from Australia’s regional neighbours in southeast and eastern Asia, means Australian dairy now offers internal rates of return of between 11-16% per annum.

The Australia Bureau of Agriculture and Resource Economics and Sciences forecasts that milk prices will at least remain unchanged over the next four years at 50 Australian cents per litre, but could head up to 52.5 cents per litre between 2018/2019.

In a scenario of this kind, investors in Australian dairy farms can expect to generate higher returns, with an Internal Rate of Return (IRR) of up to 16 percent p.a. possible. Even if milk prices were at the conservative estimate of 41.5 Australian cents, Australian dairy farms could generate an IRR of 11% from recapitalization and farm improvements, says Detlef Schoen, Group Head of Farm Investments at Aquila Capital.

Detlef Schoen commented: “The acceleration in demand has already caused the spread between supply and demand for dairy products to widen in recent years and this development is expected to continue. The OECD forecasts growth rates for milk and dairy products from emerging markets of between 1.6%-2.8%,1 which might lead to a potential demand overhang for dairy products of as much as five billion litres by 2020.

“Australia is very well placed to benefit from the increasing demand, exporting 50% of its domestically-produced dairy products.”

Dairy Australia, the national services body for the dairy industry expects production of all domestic dairy products to climb up to 2% in the 2013/14 season to more than nine million tons.

Download



Comments


14-04-2014 21:17 PM | Posted by: Fram Hand
"Could", "might", "should", achieve this, return that, etc, etc. When are these funds going to show their real investment performance?

To post comment without approval login or register

Display name

Please enter your name

Email (optional)
Comment

Please enter your comment

Post Comment

Your comment submitted successfully.Please wait for admin approval.

Some error on your process.Please try one more time.



Jobs


23 March 2015
Administration Assistant
Make sure fines have correct overhead on ticket and check lists for appropriate farms. Our client is an Infrastructure and Su...

28 March 2015
Customer Advisor and Chilled Products Forecaster
This company is part of a European food manufacturing group which specializes in dairy products producing large & small t...

20 March 2015
Crops & Agroforestry Research Technician
Interviews will be held at Wakelyns Farm, Fressingfield, Suffolk on Thursday 23rd April 2015. Further details and the applica...

17 March 2015
Plant Operator - Wight Farm Energy
Wight Farm Energy. We are currently seeking to recruit a Plant Operator to join a small team in the operation of an Anaerobic...

25 March 2015
Senior Community Fundraiser
Charlton Farm - Bristol, Little Bridge House - Barnstaple and Little Harbour - St Austell. Senior Community Fundraiser (Commu...




Top stories you may have missed
23 March 2015 | Cattle

UK butchers face difficulties to recruit...

Butchers in the UK are losing a generation through lack of training opportu...


20 March 2015 | Arable

Dust - the secret fertiliser?

NASA research has revealed how dust blown from the Sahara desert helps supp...


19 March 2015 | Arable

The Budget 2015: A Farmer's Budget?

“In the run up to the Budget 2015 most commentators were predicting that th...


17 March 2015 | News

UK's first floating solar power system l...

The UK’s first fully operational floating solar panel system has been unvei...


13 March 2015 | Animal Health

Labour and Conservatives clash over badg...

Axing the badger cull in England and Wales will save more than £120 million...


12 March 2015 | News

Solar could be cheapest energy source by...

By 2025, solar power could become one of the cheapest forms of energy in ma...


11 March 2015 | Finance

English buyers turn their attention to S...

Demand for Scottish farm land remains strong and continues to be better val...


9 March 2015 | Cattle

2020 vision for the Welsh red meat indus...

The Welsh red meat industry should aim to increase sales by at least 34 per...


6 March 2015 | News

MP raises egg industry concerns on trans...

Fears about the impact that a proposed transatlantic trade agreement could ...


Stay safe and legal when flying drones

The use of Unmanned Aerial Vehicles and Unmanned Aircraft Systems - or dron...