30 Mar 2012

Corporates eyeing up NZ farmland

7:47 pm on 30 March 2012

More corporate owners are expected to buy dairy farms, as land prices climb and herd sizes grow.

In the past twelve years, the average dairy farm has grown in size by 50%, while the average herd has risen from about 240 cows to 400.

Lincoln University's professor of farm management and agribusiness Keith Woodford says corporate ownership is becoming more prevalent, as farm prices and herd sizes grow beyond what most individual farmers can afford.

However, he says it is hard to know exactly how much of New Zealand's farmland is under corporate or foreign ownership because no precise statistics are available.

KPMG partner Ian Proudfoot says many farms are not generating enough cash to enable a son or daughter to buy out their parents.

He says banks and industry organisations need to work with farmers to establish succession plans, or the economy risks losing control of its key productive assets.

More about the changing landscape of dairy farm ownership and investment can be heard on Insight on Sunday.