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.

Over the past 10 years, interest rates in New Zealand, particularly rural floating rates, have taken farmers on a wild ride.

We’ve pulled out the data from RBNZ to show the 90-day bill since 2015.  However, instead of just showing that underlying rate on its own, we’ve added a customer margin to reflect the total rate payable for an “above average credit quality customer in a competitive situation”. This data set includes margin changes (reductions) during that time. similar to what we observe with our own customers over that period.

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.

While working on a recent project for a large Australian asset holder, I came across the Reserve Bank of Australia’s consolidated Agri debt figures. I decided to compare them with the New Zealand data.

The result is striking.

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’s increasing chatter about dairy conversions again—especially here in Canterbury—and it’s easy to see why. In many cases, the extra returns far outweigh the costs. That contrast becomes even starker when compared with lower-yielding farming systems.

Turning a non-dairy farm, whether sheep and beef, deer, or cropping, into a dairy platform is a major strategic move. While dairy can offer strong cashflow and asset growth, it also demands serious capital, operational change and long-term commitment.

At NZAB, we’ve helped fund countless dairy conversions and seen the highs and lows of the sector. Below are some hard-earned lessons worth considering.

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.

As a follow-up to the Agri Banking Dashboard that we recently circulated, we thought we’d share a couple of graphs illustrating the changes since 2018.

Firstly, market share changes since 2018:

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.