Farms in the sight of buyers as thousands of farmers approach retirement
Young farmers seem to be showing a renewed interest in beef and sheep farms with a more positive outlook in the agricultural sector.
Many farmers are nearing retirement age and considering the fate of their family farms, particularly those in sheep or beef production. However, there is a glimmer of hope as young farmers are showing renewed interest in these farms. This interest is being fueled by strong demand for meat, good prices, and a willingness by banks to lend based on current market conditions.
According to a Rabobank report, approximately 17,000 farms and orchard owners are expected to reach pensionable age within the next decade, potentially leading to a $150 billion intergenerational transfer of wealth. The average age of farmers in the sheep and beef sector is around 50, with a significant number reaching retirement age.
Federated Farmers meat and wool chairman Richard Dawkins highlights the challenge that land values do not align with the productive capacity of farms, making it difficult for the next generation to buy their way into farming. Despite the industry's profitability, the current government's carbon forestry policies have led to the conversion of around 400,000 hectares of sheep and beef land into carbon forests.
Dawkins believes this is tragic, as these lands could support our rural communities and the New Zealand economy. He notes that while the government has slowed these conversions on certain land use classes, carbon farms are still being planted, albeit at a slower rate.
The industry's profitability, combined with favorable interest rates, a supportive policy environment, and new technology, is creating a unique situation of positive conditions that may only occur once in a generation. Dawkins emphasizes that the future of farming is promising, with banks showing increased willingness to lend to young farmers.
However, he acknowledges that choosing a career in farming is not solely based on land price and economics; lifestyle values also play a significant role. He praises the sector for being profitable and productive, qualities that New Zealand prides itself on. Despite the challenges, Dawkins believes that the current favorable conditions and renewed confidence in the sector are making it increasingly possible for young people to enter the farming industry.
Written by urgent.news from RNZ Business's reporting — not their text. Machine-written — it may contain errors, so check the original before relying on it.
