Quick agCap update – now seeking new clients!
We all live in an uncertain world. How we cope with this uncertainty on our dairy farms will be governed by the strengths of our relationships and the culture that we have built within our businesses.
Originally posted September 20, 2019.
agCap signed a 3-year management agreement with Peninsula Downs.
Originally posted August 27, 2019.
agCap has expanded operations into WA.
Corporate dairy farming is often associated with thousands of cows and high-input systems but the secret to success may be something rather
more modest. In fact, agCap’s Wolﬁe Wagner says 400 to 700-cow pasture based dairy farms are in the box seat to capture the interest of savvy farm owners.
Originally posted July 5th, 2019
agCap has recently re-appointed one of our leading ex Sustainable Agriculture Fund sharefarmers, Mick Buckley to a 580 cow dairy enterprise in Southwest Victoria. After farming in Tasmania for over ten years, Mick has adapted well to the operating environment in southwest Victoria.
In Micks words, “I am like a duck on a pond – outwardly it appears that I am swimming sedately across the pond, but underneath the surface my feet are paddling like crazy.”
The move to the mainland has been a rewarding challenge for Mick and his team.
On a farm visit in late June 2019, agCap CEO Wolfie Wagner and sharefarmer Mick measured pasture growth rates of up to 40kgDM/ha/day. Wolfie said that Mick has built a great feed wedge and has set the farm up well for the rest of winter. The current grazing interval is around 46 days, meaning that should the conditions deteriorate, Mick has room to move and could open up the rotation to avoid excessive pasture damage. Additionally, Mick was quick to calculate that his daily nitrogen use was 1kgN/ha/day; compared to many in the district that were using up to 1.5kgN/ha/day.
Mick and his partner own and operate VSF Operators Pty Ltd. The company has entered into a share farming agreement with the farm owner, facilitated by agCap, who bear the responsibility and accountability for managing the sharefarmer.
Under the proven agCap share farming model, the sharefarmer is responsible for all farm labour and provides their own farm motor bikes, vehicle and hand tools. The share farmer is paid on a fixed rate per kg of milk solids produced each month and receives bonus payments in relation to herd in calf rates and milk quality.
agCap is proud to be working with Mick and his company. “We look forward to a long working relationship” Wolfie said.
Have a read of our thought piece on the advantages of a seasonal single calving model on pasture based dairy farms.
agCap is an asset manager specialising in pasture based Australian dairy farm investments, operations and management.
The Dairy Environmental Award, sponsored by Veolia, is presented to a farmer or farming business that is committed in one or more of the following areas of environmental management and can demonstrate sustained improvement that contributes to the farm business.
- Contribution to Dairy Industry NRM outcomes – for the greater good of the industry
- Better nutrient and effluent management
- Good soil and water quality management
- Water use and/or energy efficiency
- Biodiversity and protecting native habitats
agCap is proud of its environmental initiatives to improve the sustainability of its systems, promoting long-term farming solutions as part of the community.
Share Dairy Farmer of the Year, sponsored by Fonterra – awarded to Wayne and Caroline Saward.
After share farming for a total of 20 years (the last 5 with agCap) Wayne and Caroline were announced as winners of the Share Dairy Farmer of the Year award. They were one of four entrants in the competition which was judged on:
- Financial management and performance
- Herd management
- Pasture management
- Staff management and people welfare
- Relationship with farm owner
The award is run by TIA (Tasmanian Institute of Agriculture) in conjunction with DairyTas. The award is sponsored by Fonterra Australia.
Australian agricultural investment manager agCap has completed the sale of its first Sustainable Agriculture Fund (SAF) portfolio, grossing more than $180 million for investors and paving the way for a second investment vehicle to focus on Australian dairy.
The sale of SAF’s Tasmanian livestock farms concludes the final tranche of a successful sale process, which combined with the Fund’s strong three-year returns (9% p.a. after fees and tax), is expected to deliver approximately $200 million back to investors over the life of the investment.
agCap CEO Martin Newnham said he’s extremely proud of what SAF has achieved over its life and the way in which the team handled its divestment.
“In less than ten months, we managed 100 property inspections and multiple complex negotiations, all the while overseeing 17 individual farm operations within the SAF portfolio,” Mr Newnham said.
“SAF’s success can be attributed to making sound acquisitions, developing the assets, our matured management model and divesting at the right time.
“Importantly, none of this would have been possible without the patience and support of our investors who backed the original investment thesis and supported agCap throughout the life of the fund.
“The sale of SAF presents a major milestone for them as agri-investing pioneers and for us as we now look to repeat its success with a strong focus on Australian dairy assets.
“The agCap Board and management team decided to exclude agCap as a potential buyer of SAF assets for ethical governance reasons and to ensure process transparency. The insights we gleaned from the sale process, however, certainly affirms our view that well-constructed investments in agriculture can provide institutional investors excellent risk adjusted returns.”
Mr Newnham says long-run cyclical and structural change in the Australian dairy industry is creating an opportunity for institutional investors and managers to partner on a compelling investment thesis.
“Australian dairy farmers are globally competitive, produce high quality safe products with high brand recognition in domestic and overseas markets,” he said.
“We are excited by the opportunities we see in dairy, and with the support of existing agCap shareholders, we are currently assessing suitable structures for potential investors, having commenced work on a pipeline of pasture based dairies in south west Victoria and Tasmania.”
agCap’s dairy investment program is expected to be available to institutional and sophisticated investors in early 2018.
As reported in The Examiner, agCap sharefarmer Wayne Saward has decided to retire from 30-years of playing Australian rules football. Celebrating his last game, Wayne was able to play alongside his three sons, Alex, Damien and Sam with Yeoman, his local Burnie team. As Sam is a junior a special request had to be put to the local league to allow him to play alongside his father.
Wayne and his wife Caroline are in their fourth year of operating their sharefarming business on Blythe Vale, which is owned by the Sustainable Agriculture Fund. With 25-years experience in the dairy industry, Wayne estimates he’s worked on eight or nine dairy farms in his time. “This is the best farm we’ve been on,” he said of the 800-plus cow dairy farm.
Part of the appeal is agCap’s unique system of management. “Our share farming approach is to delegate responsibility to sharefarmers. This includes responsibility for the staff who work alongside them. We think it is more in keeping with our Australian family farming tradition, but with the benefit of institutional investment” explains Wolfie Wagner, General Manager for Livestock at agCap.
When combined with governance and systems in areas such as safety, budgets, and capital expenditure the system works extremely well. As Wayne explains, “We choose who works with us. Every one of them has been with us since we started. Everybody knows what to do. We don’t have to talk about it when we get here. We all just go about our business.”
The dairy industry was rocked by the announcement by Australia’s two largest processors to significantly reduce FY2016 milk prices to unsustainable levels. When combined with seasonally dry conditions in an El Niño year, this has significantly affected the financial viability of many Australian dairy farmers.
Faced with the prospect of losing money for every litre of milk produced for the rest of the season, many dairy farmers have rationally stopped milking and reduced the amount of employed labour. These cost saving measures may enable many dairy farmers to survive this difficult time, it will however place pressure on farm staff and their families who may have lost their jobs or have had their hours cut back.
As a sustainable investor in Australian agriculture, agCap has approached these difficult times a little differently.
“We were as surprised as the next person on the severity of the drop in milk prices.” says Wolfie Wagner, Southern Livestock Manager of agCap. “However, we simply got on with it and assessed the impact to our business and investigated the levers that we could pull. In the end rather than dry off our cows, we decided to continue to milk our cows for the rest of the season.”
Wolfie Wagner continues, “While we could have saved some money by drying of our cows earlier than normal, the loss of production means our sharefarmers and their staff would have suffered significantly. As a business were attracting good farm staff can sometimes be difficult, that would not have been sustainable so it was an easy decision.”
Chief Executive Officer, Martin Newnham explains. “Our approach to agriculture is that we operate long-term assets meaning we need to take a long-term approach to our decision making, to ensure the long-term wellbeing of our farms, staff and investors.”
“The unique position we have is the diversified nature of the Sustainable Agriculture Fund. We have operations in grain, cotton, beef as well as dairy. This smooths out some of the cyclical elements of our industry and this affords us the opportunity to manage through subdued prices and difficult seasons rather than acting reactively to short-term events.”