Publication: ABC Radio and online Date: 17 July 2015 Reporter: David Claughton
Australia is on the “cusp” of seeing significant growth in agricultural investment from the United States, according to three business and financial investment advisors.
Tom Rooney, from the brokering firm Waterfind, is one of many talking up investment from the United States.
“We are seeing a barrage of investment coming in and we think it’s just the tip of the iceberg.”
Mr Rooney said an ABARES report showed investment in agriculture, forestry and fisheries was up by $200 million to $1.3 billion last year, and foreign ownership of Australian land has grown rapidly over the last five years.
Brian Healey is head of agribusiness at law firm Holding Redlich.
He said there are plenty of deals coming across his desk.
“Particularly from US funds, even farming groups, [and] operating farmers in the US,” Mr Healey said.
“The largest agricultural fund managers in the world are based in the US, groups like Hancock Farm Company and Westchester, [and] big global funds are interested in Australia.
“Many of them are making investigations now and I think we’re on the cusp of seeing some significant investment in this sector.”
He said they are looking at nuts, cotton and beef, and they see a lot of value in the real estate.
“Many of them see it as a pure real estate play.
“Some of them are buying our land and leasing it back to existing operators.”
“Some people are talking about a wave of investment coming into our agricultural sector and I know on my desk, my experience is that that’s right.”
Mr Healey said investment coming from China is driven by the demand for good quality food, which justifies their investment. But he said US investors recognise agriculture as an asset class of its own which can generate income.
“Good returns can be made from them and they know the Australian agricultural sector is as good as you will get.”
One company that already has a big footprint in Australia is McDonald’s Asia Pacific Consortium.
It is made up of five global companies, including Cargill, which uses its Australian base to source meat to produce patties for McDonald’s burgers.
Managing director Frank Carbone said there has been significant investment over the last two years in the meat processing sector and with prices rising he expects to see more.
“Particularly in the supply chain infrastructure side...warehousing, logistics infrastructure and cold storage to manage the chilled and frozen supply chains,” Mr Carbone explained.
“There are new constraints on foreign ownership, but importantly they don’t apply to some countries, including the US.”
ABC Radio Audio: A "barrage" of US investment in Australia (ABC Rural) （http://www.abc.net.au/news/2015-07-17/rural-us-investment-agriculture/66276460）
