THE COMMERCIAL manager of a start-up corporate cropping business managed by stalwart player in corporate farming in Australia, Warakirri, said money will continue to flow into the sector from non-traditional sources.
Belinda Turner, commercial manager at Daybreak Cropping, which is a national broadacre cropping business managed by Warakirri Asset Management. said the broader market was warming to the idea of agriculture as an investment opportunity.
“Traditionally agriculture has been considered a defensive asset class, something that is not correlated with the rest of the equity market but more than that, people are also realising that over the long term agriculture provides good returns on investment,” Ms Turner said.
She said Daybreak Cropping, which operates properties in NSW, Victoria and Western Australia, was looking to further expand and said overall there were various different strands of investors all looking to get into agriculture at present.
“Loosely defined corporate farming is an ag business that uses capital other than the operators,” Ms Turner said.
“Within that we can see a range of investors, from the managed funds handling the capital of smaller investors, high net wealth individuals and super funds.
“Along with that we are seeing more ag projects funded using venture capital and sovereign wealth funds have also been investing so the range of sources of capital is very diverse.”
Ms Turner said even though there was currently a lot of focus on corporate farming it was nothing new to Australian agriculture.
“A company like AACo dates all the way back to 1824 when it was set up with a charter to get agriculture started in NSW using outside capital.
“More recently we saw corporate farming play a big role in opening the Esperance region in WA up for cropping in the 1960s.
“That Esperance zone is now a large and reliable grain producing region.”
“In NSW we had JG Boswell, which became Auscott, involved in setting up the cotton industry in the Namoi region so there are plenty of examples of where corporate farming has come in and had a positive impact on Aussie ag.”
Speaking at the recent Innovation Generation conference hosted by Grain Growers and geared towards young people in agriculture, Ms Turner said one of the major obstacles to growing corporate farming was attracting the right people.
“Getting skilled people out there with a knowledge of the technology, they can be hard to find.”
“There are a lot of opportunities whatever sector of agriculture you are interested in, obviously the on-farm activities but also in other parts of the business - accounting, strategy, IT etc.”
In terms of where Daybreak Cropping would look to expand Ms Turner said the company had a formula it used when decided where to make its investment factoring in things such as rainfall, soil type and historic yields.