Harvest brings buyers back to market
A leading rural bank has tipped a big jump in property and machinery sales after a remarkable turnaround in WA's farming fortunes over the past six months.
Rabobank acting State manager Stephen Kelly said yesterday that 2013 would go down as a fork in the road for WA farming after it started raining in July and stopped just in time for a bumper harvest in the Wheatbelt.
Mr Kelly said there had already been a trickle of farm transactions around the Wheatbelt and predicted a jump in sales after two virtually stagnant years.
"I expect that to start when money hits bank accounts," he said. "You are going to get sellers looking at it as an opportunity to act on the confidence that is out there and meet the market. And buyers are going to be active where there are properties with good production histories."
Mr Kelly said there had been competition for some of the farms already changing hands but warned he did not expect activity in the market to return to pre-2010 levels. He said while some farmers would use the best profits in a decade to expand, many others would "restore balance sheets to a strong position".
WAFarmers president Dale Park welcomed movement in the farm market.
"We might lose some farmers out of it, but there are blokes at the end of their tether who want to sell but haven't been able to for a couple of years," Mr Park said.
Mr Kelly said equity levels had increased up to 10 per cent among the handful of clients with early budgets in place.
"Some farmers are saying it is a once-in-a-lifetime season from an income perspective," he said.
"We are most likely witnessing the equal-largest crop on record (about 15 million tonnes). In addition, wheat prices have held around the $300/t mark, which is slightly above the price used in most budgets at the start of the year. This has been amplified by the fact that farmers kept their costs down this year . . . closing their cheque books earlier in the season when things did not look like they would shape up well."
The results of Rabobank's rural confidence survey, released yesterday, showed 35 per cent of WA farmers expected their business performance to improve over the next 12 months while 30 per cent expected to increase their investment in farming.
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