10 Oct 2008

'Business as usual' with rural lending - Rabobank

11:07 am on 10 October 2008

Specialist rural bank Rabobank says its approach to farm lending is "business as usual" despite volatility in international finance and commodity markets.

While the domestic economy is slowing, along with difficulties in global financial markets, rural manager Ben Russell says Rabobank is confident about the outlook for New Zealand agriculture.

Despite the cycles of ups and downs, he says the bank is looking at the medium to long term outlook for New Zealand agriculture.

Rabobank has a 15% share of the rural lending market.

New Zealand's biggest rural lender, ANZ National Bank, has said the financial tumoil and falling dairy prices will slow the rush to dairy farm conversions as some farmers planning conversions or expansion put their plans on hold.

Meanwhile, a ne company that's been very active in dairy farm conversions has scaled back its plans for a large scale development in Mid-Canterbury.

Myfarm, which buys and manages farms on behalf of investment syndicates, had a conditional contract to buy a 615 hectare property that would have been run as four dairy farms.

But director Andrew Watters says it's had to revise those plans and has bought one instead of four, because of the situation with raising capital.

He says Fonterra's latest milk payout forecast of $6.60 per kg of milk soldis is still a good return and rural property remains a solid investment option.