Agriculture Private Credit
The Agriculture Credit Fund invests in Senior Secured First Mortgages across a diverse range of agricultural assets, including cropping, poultry, livestock, horticulture, and viticulture assets.
The markets for these assets and the commodities they produce have benefited from attractive supply and demand fundamentals. Demand for quality Australian and New Zealand produce continues to advance with population growth and changes in dietary trends, while the recent improvement in seasonal conditions has enhanced supply dynamics. The drought has broken across the eastern seaboard of Australia as the La Nina weather cycle winds down, and water storages and sub-soil moisture have improved in key cropping areas in Eastern Australia. This has increased the outlook for the 2021/22 winter crop and provided good paddock feed levels for livestock producers.
Livestock prices have been strong and the Eastern Young Cattle Indicator (EYCI) recently hit a new record of 951c/kg, up from 500c/kg January 2020. Global milk prices have also been increasing and in the wine sector, the average value of wine grapes increased by 1% in 2021 to the highest level since 2008.
The combination of higher commodity prices and low interest rates has also underpinned strong activity in the rural property market, supporting land value growth and asset valuations. The annual funding gap in the agriculture sector across Australia and New Zealand is significant at more than $10bn per annum, and this gap offers a unique opportunity for the Agriculture Credit Fund to invest in quality Australian and New Zealand agriculture assets which provide attractive investment returns with limited downside risk.
Melbourne Lockdown 5.0 and the dislocation between the AUD and commodity prices for Australian exports
The Agriculture Credit Fund invests in Senior Secured First Mortgages across a diverse range of agricultural assets, including cropping, poultry, livestock, horticulture, and viticulture assets. The markets for these assets…