Information only disclaimer. The information and commentary in this email are provided for general information purposes only. We recommend the recipients seek financial advice about their circumstances from their adviser before making any financial or investment decision or taking any action.

A few weeks ago, we announced the launch of NZAB Capital and our new $500 million agricultural lending platform. At the time of launch, approximately $30 million of loans had already been drawn.

Only a short time later, that number has now grown to more than $80 million of lending either drawn or committed.

While NZAB Capital is an exciting new part of our business, it is important to reinforce that NZAB’s core business remains advisory led.

For nearly a decade, NZAB has worked alongside farming businesses across banking, debt structuring, succession, growth, governance, capital structuring, acquisitions, and long term strategic planning. A significant part of what we do every day is still helping farmers improve outcomes with traditional main bank funding through better structuring, stronger presentation, and clearer strategic alignment.

In fact, one of the interesting things we’ve already seen since launching NZAB Capital is that some situations initially presented to us as “non bank lending opportunities” have actually ended up back with a main bank once the strategy and structure were better aligned.

That remains a very important part of our philosophy: Capital follows strategy and farmers goals, not the other way around.

What NZAB Capital does is broaden the range of capital solutions available to farmers when timing, leverage, speed, transitional periods, or structure mean a traditional bank may not currently be able to support a strategy in full.

That growth in demand since launch has reinforced something we already suspected - New Zealand agriculture is increasingly requiring a wider range of capital options sitting alongside the traditional banking system.

In many ways, this is the re-emergence of genuine non bank agricultural lending in New Zealand

What is a non-bank lender?

Non-bank lenders are already a very established part of the New Zealand financial system.

Most New Zealanders interact with non-bank lending regularly, even if they don’t realise it.

In residential housing, non-bank lenders have become a significant part of the market, particularly for borrowers who are self-employed, have complex structures, require faster approvals, or sit outside standard bank criteria.

Non bank lending has become very notable in the commercial property and business sectors. Non-bank lenders now play a major role funding development projects, transitional property transactions, business acquisitions, bridging finance, and restructuring situations where traditional banks may be slower moving or more constrained by internal credit settings.

Information only disclaimer. The information and commentary in this email are provided for general information purposes only. We recommend the recipients seek financial advice about their circumstances from their adviser before making any financial or investment decision or taking any action.

I have just returned from another trip to the United States, and something stays with me every time I come back.

Not the scale of agriculture. Not the depth of their capital markets. It is the feel of it. The way businesses, farmers, and investors talk about opportunity, and the pace at which decisions move when something stacks up.

Recently, we had the opportunity to facilitate a session at the SIDE conference held in Lincoln on the Pathways to Wealth Creation through partnerships, featuring three farming families who have built multi-farm businesses from scratch by partnering with other people.

These weren't farmers who had inherited operations or started with significant capital, they entered the industry with very little and built substantial wealth over time. They are continuing to grow their businesses now, despite what many feel as a lack of repeatable pathways through the dairy industry today.

Information only disclaimer. The information and commentary in this email are provided for general information purposes only. We recommend the recipients seek financial advice about their circumstances from their adviser before making any financial or investment decision or taking any action.

Recent geopolitical tension involving Iran has reintroduced volatility into global energy and commodity markets. For New Zealand farmers, the exposure is both direct and indirect and likely to be material, flowing through fuel, fertiliser, freight, and imported inputs.

This article focuses specifically on operating cost-side budgeting. It does not address product pricing (milk, meat, grain) or interest rate movements, both of which will remain volatile and require separate analysis. The intent here is to help farmers build cost structures that remain workable under uncertainty and to manage their funding facilities, operating decisions and strategies accordingly.

Where Cost Pressure Will Emerge

Global shocks tend to concentrate into a small number of cost lines. These are not theoretical risks; they have moved sharply in this disruption and will likely do so again if instability persists. An important point to note here is that they can move not only up but also down.

We’ve extracted the diesel fuel price data from MBIE and created the graph below to remind ourselves that we have been here before and to show how volatile this expense can be.

Information only disclaimer. The information and commentary in this email are provided for general information purposes only. We recommend the recipients seek financial advice about their circumstances from their adviser before making any financial or investment decision or taking any action.

There is no point pretending the pressure on New Zealand’s arable sector is one-off, because a meaningful part of it is real, structural, and unlikely to disappear quickly.

Feed grains continue to operate under a pricing ceiling set not just by domestic demand but by imported alternatives, with PKE or imported grains anchoring the economics of locally grown feed wheat and barley. At the same time, fertiliser, labour, energy, compliance, and finance costs have all reset higher than they were five or six years ago.

Growers are also coming off a tough season in parts of the country, which reinforced a familiar but uncomfortable truth: a good crop in the paddock and a good financial result in the bank account are not always the same thing.

But it would be just as misleading to conclude that arable farming is in decline, because that is not what is actually happening on the ground.

What the 2025/26 season has really exposed is a sector under tension, where the spread between strong outcomes and poor ones has widened materially. Increasingly, success is not just about yield and price, but about how well the business manages the intersection of multiple variables including structure, timing, quality, climate, crop mix, and markets.

This is not a story about one difficult harvest. It is a story about what type of arable business will remain resilient in a more volatile environment.

Why this matters more than it appears

It is important to step back and understand what is actually at stake.

The "arable industry" (which excludes vegetables such as potatoes, carrots, and onions) is a significant part of New Zealand agriculture. While its export profile, at around $350 million, appears modest compared to dairy or meat, that understates its true economic contribution.

Arable production feeds directly into both the human food chain and the livestock sector. When domestic grain is displaced by imports, that value leaves the country rather than circulating within it.

In total, the sector contributes close to $1 billion to GDP, supports more than 11,000 jobs, and drives over $2 billion in direct and indirect economic activity.

It's no secret that at NZAB we have been working on ways to expand the availability of capital to New Zealand farmers for a while now.

We've talked at length about the impacts increasing regulation has had on Bank risk appetite, about how critical it is that capital is available not just for those farmers that 'fit the mold' but those that operate in the real world, the one where things don't always tick all of the boxes, where calculated risks are taken, and ultimately where wealth is created and protected.

A new Lending Option

We have built NZAB Capital as a genuine non-bank lender that provides first mortgage loans for a 3 to 5 year term enabling farmers to execute on their development, expansion, or restructuring strategies before refinancing bank to main bank.

We have built this from the ground up using what we have learned over the past 25 to 30 years in the industry, developing our own credit processes, embedding local decision making, and creating a funding structure that ensures we can scale, but most importantly support farmers through the inevitable commodity cycles.

Over the past 12 months we have explored multiple options to fund our platform. It was important to us that we were able to provide loans and working capital structures that matched farmers needs, and capital at a price that ensured businesses succeeded rather than failed.

We are incredibly proud to have Macquarie Bank supporting us with an initial $500m of funding. We've got the scope to grow beyond that, and have already met with many other global capital providers that will undoubtedly support our platform as it grows.

We are already underway, with $32m of loans drawn so far, and many more in progress.

Supporting what the Banks do well

Over the last nine years, we have seen that Farmers are incredibly good at backing their own judgement and building strong businesses over time, but we see more and more situations where the strategy makes sense but the Bank simply cannot support it under their criteria.

NZAB Capital is designed to complement this with the capital required to get through the initial period, and create a track record that a Bank can support.

Taking this approach ensures that we are creating new capital for the industry, rather than competing to refinance what is already there. This is critical if we are to create pathways to fund our future farmers.

Powered by Advisory

NZAB Capital is enabled by our existing advisory offering. For our team, it's as simple as another tool in the toolbox when the strategy has been clearly defined. 

Our team brings together New Zealand's most experienced Agri Banking professionals, with more than 500 years of combined industry experience. We have built strong, long standing relationships with the Bankers, Accountants, Lawyers and other intermediaries that work closely with our farmers. Being able to support those relationships and capability with capital is an exciting natural progression for NZAB. 

Find out more

NZAB Capital is only available via our Advisory team at this stage, so please click here to connect with our team, or here to send us a message via our website.

Capital, Confidence, and the Question of "What's Next?"

Information only disclaimer. The information and commentary in this email are provided for general information purposes only. We recommend the recipients seek financial advice about their circumstances from their adviser before making any financial or investment decision or taking any action.

 The New Zealand dairy industry finds itself in a position that would have been hard to imagine not that long ago. Balance sheets are strong. Cashflows are robust. Debt levels, in many cases, are trending down faster than bankers expected. Payouts have been solid, and the upcoming Fonterra capital distribution is adding another meaningful injection of liquidity into an already well capitalised sector.

On almost every traditional financial metric, dairy is in a position of strength.

And yet, beneath the surface, there is a growing sense of tension, not from stress or distress, but from abundance. When capital is plentiful, confidence is high, and opportunities feel scarce, the real challenge becomes strategic, not operational.

This is where the industry is right now.

A Sector Flush with Capital and Optionality

Most dairy businesses today are operating with strong free cashflow. Years of discipline, improved productivity, and favourable pricing cycles have created a cohort of farmers and owners who are not just surviving but thriving. Debt repayment has accelerated. Working capital buffers are healthy. In many cases, businesses are carrying less leverage than they have in decades.

Interestingly, this strength is now creating a new dynamic with lenders. Bank confidence in the sector is extremely high. Many bankers quietly admit they are more concerned about too much debt being repaid than too little. From a portfolio perspective, dairy exposures are shrinking faster than forecast and that brings its own pressures around balance sheet growth and targets.

This is a rare position for any industry to be in: where lenders are supportive, capital is cheap and available, and risk appetite is strong.

The question is, what do you do with it?

The Scarcity of Dairy Opportunities and the Fear of Missing Out

At the same time, there is a noticeable lack of available dairy assets coming to the market (or more accurately, the fear of). Properties that do come to market attract strong interest, are fiercely contested, and often attract multiple motivated buyers in unconditional positions. Each tender feels like it might be the opportunity and missing out can create a quiet but powerful fear of falling behind.

This scarcity is driving behaviour. It’s encouraging people to stretch, to compromise, or to wait uncomfortably on the sidelines with capital that has nowhere obvious to go. For an industry built on land ownership as the primary wealth engine, the lack of acquisition opportunities creates frustration and strategic paralysis.

Yet scarcity can be a signal, not just a constraint. It often marks the point where the next phase of growth looks different from the last.

Information only disclaimer. The information and commentary in this email are provided for general information purposes only. We recommend the recipients seek financial advice about their circumstances from their adviser before making any financial or investment decision or taking any action.

There has been no shortage of noise in agriculture over the last few years- interest rates, regulation, climate, politics and whipsawing commodity prices. But when you strip that away and look at the fundamentals, 2026 is shaping up as the start of one of the most interesting periods for farming businesses in more than a decade.

Balance sheets are stronger than most realise. The cost of capital has materially reset. Bank appetite is back. Non-bank capital is finally paying attention. And succession, long considered one of the most challenging issues in farming, is starting to be solved with better tools and innovative thinking.

Here are some of our key reasons for optimism:

1. Balance sheets are getting seriously strong.

From a dairy perspective, the last 3–5 years have generated substantial cash across most systems. Dairy debt has fallen to around $18.50/kgMS, down from a peak of approximately $22/kgMS. Adjusted for inflation, the reduction in real leverage is even more pronounced.

Jordain Beattie
NZAB - Client Director

Louise Gibson
The Sharefarming Consultants

Sharefarming success doesn’t happen by chance. It’s built on clear communication, shared goals, and solid planning from day one. That’s why NZAB and the Sharefarming Consultants have teamed up to share insights from both the financial and practical sides of the equation. Together, we’ve seen that when farmers treat sharefarming as a true business partnership, not just a contract, it creates better outcomes for everyone involved - more trust, stronger performance, and a clearer path to long-term success.

The following insights are shared by Jordain Beattie from NZAB and Louise Gibson from the Sharefarming Consultants, highlighting key areas to focus on when setting yourself up for success in a sharefarming arrangement.