The drought has broken

The drought has broken and agricultural land values are growing strongly which further underpins our growing agriculture credit book

• Key farming regions across eastern Australia are enjoying their best season in decades as rainfall drives production and confidence in one of Australia’s key industries.
• Importantly, many other parts of the world are experiencing poor rainfall and hot conditions which will underwrite robust commodity prices that could result in high prices and good production for Australian farms.
• Farmland values were up 12.8% in the June quarter from March (Australian Farmland Index)
• With over 25% of the Partners Fund exposed to agriculture, the diversification benefits of this asset class in the face of the COVID-19 pandemic is proving to be the differentiator between our strategy and other mortgage funds.

For the majority of eastern Australia’s farming businesses, the drought has broken, and record crop production is forecast for the 2020/21 season. This comes after three years of dry weather, high water prices, bushfires and general uncertainty facing the sector.

As the chart shows below, key farming regions across northern Victoria and NSW have gone from record low rainfall to the highest rainfall on record in some regions.