Rising fuel, fertiliser costs to crimp bumper farmland returns
26th June 2022Agriculture Investors
Bumper conditions in the $80 billion agricultural sector lifted total annual returns for prime farmland to almost 15 per cent over the year to March, but increasing headwinds, including rising fuel and fertiliser costs, have dampened the outlook.
Over the March quarter, the ANREV Australian Farmland Index – which tracks the performance of a $1.8 billion basket of institutional-grade assets managed by the likes of Aware Super, Gunn Agri Partners and Rural Funds Management – generated a total return of 2.5 per cent, taking the total annualised returns to 14.7 per cent.
This was higher than the 13.1 per cent total return generated over the 2021 calendar year, as most farmers benefited from above-average winter and summer crop harvests and soaring commodity prices, including beef.
Published in the Australian Financial Review, written by Larry Schlesinger.