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New Zealand Property - PGG Wrightson Real Estate
19 March 2018

Real Estate Market Update, March 2018

As you will see in our latest edition of the Rural Property Pulse, this summer’s market for rural property featured various highlights.

Demand for sheep and beef farms, viticulture and horticulture properties ranges from steady to spectacular. In most instances, among farmers and growers in these categories, confidence is up, export markets are willing and climatic conditions are driving excellent yields.

That said, insufficient listings are holding back the market for all these land uses as farmers and growers choose to make the most of the propitious circumstances by farming on rather than cashing in. Any dry stock farmers and kiwifruit growers considering listing property should be encouraged by the high level of buyer demand and can expect a warm reception from an under-supplied autumn market populated by a gallery of eager purchasers.

Undoubtedly, there are some significant issues in the rural sector, including banks reducing their exposure to agriculture and rural property, uncertainty around the impact of the government’s changes to the overseas investment guidelines, and water quality concerns, which are all creating grounds for disagreement on land values between some buyers and sellers. These are temporary factors that should all work their way through the system relatively soon, with the market adjusting and increasing in activity levels when that correction occurs.

For those of us who see the glass as more than half full, what we can look forward to in the autumn is considerable attention directed towards a selection of desirable listings in various regions. These cover most land use types, particularly those that are generating the best export returns. During the next few months, we expect some high-profile listings of prestigious farms and orchards will set the scene for fierce competition from a pool of well-resourced buyers.

It should be an interesting autumn.

Peter Newbold
General Manager
PGG Wrightson Real Estate Limited

For more market information, see our latest issue of Rural Property Pulse.

16 March 2018

Dairy & Genetics Market Update, March 2018


It has been pleasing to see a lift in forward sale activity for herds and in calf heifers over the past few weeks. Herds in general are selling for $1600 - $1850, with some top end stock above this.

Most areas have completed or commenced pregnancy testing with mixed results being reported, some farms are in excess of 30%.

Both dairy and beef farmers are still dealing with the uncertainty attached to the Micoplasma Bovis outbreak – all concerned farmers should keep up to date by regularly visiting the MPI website or contacting their vetranarian.


Autumn is in our sights and the weaner sales are starting up around the country. Demand and beef outlook is looking very confident.

When selling weaners it’s a good opportunity to discuss your prospective sire bull purchases with our team on the ground. This will give you a great insight with a variety of breeders and help us understand your breeding objective and goals.

This year we are holding an open day in Manawatu on Wednesday 21st March, 11.30-1.30 at 641 Milson line, Feilding. This is a great opportunity to see 37 Angus bulls from across New Zealand.

The PGG Wrightson National video sale will be held on Monday 14th May, Palmerston North Convention centre 4pm.  Hereford, Shorthorn and Angus will have open days on the day of sale and this will be open to the public. 

For more information, sign up to the Agonline email updates.

AgOnline Sheep & Beef March 2018
12 March 2018

Sheep & Beef Market Update, March 2018

North Island Sheep and Beef

North Island beef farmers are set for a positive few weeks of weaner sales through the first half of the autumn. Last year’s weaner sales achieved record prices with encouraging volumes of cattle going through the yards. This year, we have plenty of grass on the paddocks, and farmer confidence is at high levels and quality animals are likely to remain at least as highly sought after as they were at the weaner sales 12 months ago.

Weaner sales start early in March, in Northland, and progress down the country from there over the following six to eight weeks, finishing in Gisborne and Manawatu in mid-April. Sales will be held in around 20 individual saleyards. Recent trends have shown a good mix of local and external buyers at all these North Island weaner sales. Last year record prices were set at the Masterton weaner sale so this year’s Masterton sale will be the one to watch.

Black cattle are always sought after at the sales, with the trend towards them growing ever stronger. Angus always sell well, though so do good cattle in any breed. This year, prices for dairy cross cattle should also hold up. We expect Hereford-Friesian weaners to be in strong demand.

South Island Sheep and Beef

South Island has enjoyed wide spread rain in the last two weeks. The drier areas such as Otago and Southland will certainly benefit from the rain which will give pastures and winter crops a much needed boost.

With the dry prevailing in Southland and Otago, stock that is normally finished has had to be sold as stores. Thankfully Canterbury and the North Island has good feed conditions to buy in the increased numbers of store animals that become available.

With the start of calf sales starting within the next two weeks farmers are gearing up to purchase calves. There has been a lot of enquiry from both the South and North Island to purchase calves, this should see strong demand through Auction and Private sales.

For more information, sign up to the Agonline email updates.

Fruitfed Facts March_Water quality_Blog
6 March 2018 Tayah Ryan

How's your water quality?

Fruitfed Supplies Senior Technical Advisor Tayah Ryan considers water quality and its impact on horticultural practices.

It’s not often we give much thought to the water we put in our spray tanks, but water quality can have a significant influence on the stability of chemicals within the spray tank.

Poor water quality can result in the breakdown of active ingredients within the tank and can negatively impact on their effectiveness on the target pest or disease. While there are a multitude of factors that impact on water quality, the two main aspects we will focus on in this article are pH and water hardness. Water hardness is a measure of the amount of positively charged ions present.
Calcium (Ca2+) is the most common, but magnesium, iron and manganese can also have the same impact.

Some agrichemical products hold a strong negative charge. Negatively charged products (e.g. glyphosate) attract positively charged particles (e.g. Ca2+) within water. Hard water containing many positively charged particles can therefore result in the product becoming ‘locked up’ and consequently unavailable for absorption into the plant. Sticking with glyphosate as our example, a water hardness reading of 300 pm can lock up to 30% of the glyphosate active. pH in its simplest form is a measure of how acidic or alkaline a solution is. Generally, when we talk about water for spraying, a pH above 8 might be considered ‘high’, although this can vary somewhat depending on the product (consult individual product labels for more detail).

Generally, the more sensitive a product is to pH, the faster it will hydrolyse, i.e. break down, in the spray tank if outside of this optimum. Insecticides tend to be particularly sensitive, and usually prefer a slightly acid pH. In comparison, copper fungicides should never be acidified, as this can result in excessive release of copper ions into the spray solution and can cause spray damage on fruit and/or leaves. General comments regarding water quality

  • A water test is generally the most accurate way to determine water quality. Your local Fruitfed Supplies store can assist with this.
  • Always check the product label for information regarding water quality and the chemical you are spraying.
  • Always try to spray out your tank in one day, and don’t leave sitting overnight. This is particularly important where your pH may not be in the optimum range for the product used.
  • There are products available to adjust both the pH and the hardness of your spray water (e.g. X-Change) if this is what’s required.

For more information on water quality and how to test, talk to your local Fruitfed Supplies store for advice. Find them here

27 February 2018

PGG Wrightson delivers impressive first half performance

PGG Wrightson Ltd* (PGW) announced today that at the half-year it is on track to surpass last year’s strong operating result. 

For the half year ending 31 December 2017 operating earnings before interest, tax, depreciation and amortisation (Operating EBITDA)** of $34.2 million were up $8.2 million on the prior corresponding period ($26.0 million) and is PGW’s best first half result in a decade. Net profit after tax was $14.6 million, $0.4 million lower than the same period last year due in part to movement in the New Zealand dollar.

PGW Chairman Alan Lai said, “We advised in October last year that against a backdrop of higher commodity prices, lower agricultural production and a delayed start to spring we expected our Operating EBITDA to be at a similar level to 2017. It is pleasing to be able to report that the business has achieved a first half performance at an Operating EBITDA level that is stronger than last year. Furthermore, we expect this strength to continue and anticipate Operating EBITDA to exceed 2017’s result and be in a $65 million to $70 million range. Previously we also expected that net profit after tax (NPAT) for FY2018 would be approximately 30 percent lower than FY2017 due to a reduction in gains on property sales given that our divestment programme is now largely complete. With this stronger trading performance we now expect NPAT to be approximately 20 percent lower.

PGW’s Board declared an interim dividend of 1.75 cents per share, which will be paid to shareholders registered at the record date of 16 March 2018. The dividend will be fully imputed and paid to shareholders on 5 April 2018.

PGW Chief Executive Ian Glasson noted, “This is a very pleasing result for the first half. We have a highly- engaged team who continue to deliver good results through the market cycles and weather variability that impact the agri-sector. The lift in Operating EBITDA on this time last year is heartening and puts us in a strong position as we move into the second half. This performance was achieved with most of our businesses trading well through the first half.

“The Agency group delivered an excellent result with a more than two-fold increase in Operating EBITDA. The Livestock business benefited from strong international demand for protein and reduced tallies which combined to push up livestock prices across New Zealand. In addition, our Livestock supply chain products continue to perform well. There was an improved performance by our Wool procurement and brokering business despite reduced demand for global crossbred wool. The Real Estate business had a challenging first six months but maintained market share and remains well positioned when market conditions improve.

“The Retail and Water group performed superbly with a 25 percent increase in Operating EBITDA over the same period last year and was largely built on the operating performance in our Retail business.

“The Retail business performed extremely well during a period when they look to deliver more than 85 percent of their full year Operating EBITDA. It was pleasing to see that they finished with Operating EBITDA higher than the same period last year despite some challenges with weather. Wet growing conditions in spring were followed by dry conditions in November and December. The impact on horticulture was the advance of harvest dates. This resulted in spray programme applications being brought forward and as a consequence some of the sales that were planned for January occurred during December. All three Retail business areas (Rural Supplies, Fruitfed Supplies and Agritrade) contributed to the pleasing result.

“The Water business continues to be challenged by the lack of on farm development. Despite this, the business is seeing a number of opportunities come to fruition, such as the successful tendering to supply irrigation to the Royal Auckland and Grange Golf Club, and Millbrook developments.

“Seed and Grain performed well increasing Operating EBITDA by $2.2 million over the same period last year.

“The New Zealand Seed and Grain business had a strong result due to favourable weather conditions in spring, compared to the same period last year. Recovery in the grain and forage seeds market along with a lift in performance in international shipments due to high yields resulted in an increased Operating EBITDA in New Zealand.

“However, a reduction in spring sales increased closing inventory levels in both the Australian and South American businesses. Initiatives are in place to alleviate working capital demands across the Seed and Grain group and we expect that to improve as the Australian business performance is traditionally focused in the second six months of the financial year.

“The Seed and Grain group’s continued investment in research and development was highlighted in spring with the launch of our environmentally functional programme, NSentinel 4, which includes our new plantain product, Ecotain. We also had impressive demand for the first full commercial year of our Raphanobrassica product.

“Net cash outflows from operating activities was $49.8 million up from $16.2 million on the same period last year. Receivables increased largely as a result of the continued success of our Go range of livestock products and the weather-driven seasonal delay in planting, which pushed our seasonal peak in working capital closer to December than usual. However, due to our continued focus on cash management, we have seen good collections in January and February. We continue to invest into the business to improve facilities and operating systems, and we continue to foresee growth in our Go products. Currently we expect year end debt levels in June to be approximately $30 million higher than June 2017 due to increased working capital across Seed and Grain, Retail and Water, and Go livestock receivables. Much of the growth in debt over the last two years can be attributed to our working capital investment in Go product receivables that are proving to be popular for both our clients and profitable for the company. If you exclude the effect of Go products from our net interest-bearing debt you will see that our debt as at December 2017 is within a few million dollars of our debt levels as at December 2015,” said Ian Glasson.

In October it was announced that the Board had made a joint appointment of Credit Suisse (Australia) Ltd and First NZ Capital Ltd as financial advisers to assist with a strategic review of PGW’s business, its growth opportunities, capital and balance sheet requirements, and potentially shareholding structure. PGW Chairman Alan Lai noted that “the review remains ongoing and it is hoped that the Company will be in a position to comment further on outcomes from this work later in the year”.

Ian Glasson noted, “As PGW enters the second half of the financial year, we do so with confidence. We remain optimistic that the positive trading environment will continue through the second half of the year in New Zealand, but as always, across all markets, we wait to see what autumn conditions will bring and how these will impact our business as we move into the key planting and harvesting periods. In particular, our Australian and South American business are dependent on favourable autumn weather conditions.

“Dairy price expectations for the season have softened but are still ahead of this time last year. Milk production companies are expecting production to fall for the remainder of their season. We have seen some increase in confidence in the dairy market but activity is still constrained as dairy farmers remain cautious in their decision making.

“We expect continued strong lamb and beef commodity demand and pricing. This is buoyed in part by good feed supply across the country, except for Southland and parts of Otago where drought was officially declared in late January. Our staff continue to work alongside local rural support and industry groups to assist customers in all drought-affected areas who remain impacted despite recent rain events.

“Crossbred wool prices have stabilised at low levels and growers are starting to meet the market and with inventory beginning to move through auctions again. The demand for fine wool is heartening and we are making gains in that market with international supply chain contracts increasing.

“The second six trading months for the Retail and Water group are always lower revenue months which reflect the role the business has in farm activity at that time of the year. The excellent result delivered by the Fruitfed horticulture business in the first half of the financial year is set to continue with large-scale grape, kiwifruit, apple and avocado producers experiencing favourable returns and forging ahead with extensive development. The added benefit of this customer investment to our business is the increase in sales in fencing, machinery, horticulture merchandise, water and irrigation categories.

“The outlook for the Seed and Grain group remains positive for the second half of the financial year. Subject to favourable autumn planting and climatic conditions in our key market, we expect these businesses to deliver good second half results. The South America business continues to recover from the impact of the devastating floods of 2016.

“Of course, as a business we cannot continue to perform well without a highly-engaged team. When I joined PGW last year, I was immediately impressed with the commitment and passion for agriculture that our staff display. I have visited customers and our staff in the field and I see many examples of the enduring relationships our people have with our customers. We share our expertise and are invested in our customers’ performance.

“With this in mind, along with confidence in continued positive market conditions, I believe we are on track to deliver a full-year operating result to surpass last year at an Operating EBITDA level. Much of the earnings of our South American, Australian and Livestock businesses won’t be certain until later in the financial year, but currently we expect FY2018 Operating EBITDA to be in the $65 million to $70 million range and NPAT to be approximately 20 percent lower than last year,” concluded Ian Glasson.

Ian Glasson
Chief Executive Officer
PGG Wrightson Limited

*All references to PGG Wrightson Limited or the Group refer to the Company, its subsidiaries and interests in associates and jointly controlled entities.

**Disclosure Statement: Non-GAAP profit reporting measures:
PGW’s standard profit measure prepared under New Zealand GAAP is “Net profit after tax”. PGW has used non-GAAP profit measures when discussing financial performance in this document. The directors and management believe that these measures provide useful information as they are used internally to evaluate performance of business units, to establish operational goals and to allocate resources. They also represent some of the performance measures required by PGW’s debt providers. For a more comprehensive discussion on the use of non-GAAP profit measures, please refer to the policy Non-GAAP Accounting Information available on our website.

Non-GAAP profit measures are not prepared in accordance with NZ IFRS and are not uniformly defined, therefore the non-GAAP profit measures reported in this document may not be comparable with those that other companies report and should not be viewed in isolation or considered as a substitute for measures reported by PGW in accordance with NZ IFRS.

PGW’s definition of non-GAAP profit measures used in this document:
Operating EBITDA: Earnings before net interest and finance costs, income tax, depreciation, amortisation, the results from discontinued operations, fair value adjustments and non-operating items.

GAAP to non-GAAP reconciliation:

($m) Dec 2017 Jun 2017 Dec 2016
Net Profit after Tax (GAAP) 14.6 46.3 15.0
Add (Profit)/loss from discontinued operations (net of income tax)  0.0 (0.0) (0.0)
Add Income tax expense
6.6 10.4 4.6
Add Net interest and finance costs 8.0 6.2 1.5
Add Depreciation and amortisation expense 6.1 10.7 5.2
Add Fair value adjustments expense/(income) 0.1 0.4 0.3
Add Non-operating items expense/(income) (1.3) (9.5) (0.5)
Operating EBITDA 34.2 64.5 26.0
Read more about the Half Year Results
Rural Diary Pasture Renewal
22 February 2018 External Supplier

Choosing a top performing perennial ryegrass

Over ten years of investment in breeding, research and development has paid off with recently released Platform AR37 jumping straight to the top of this year’s National Forage Variety Trial (NFVT) summary.

Nick Browning, Northland dairy farmer, compared Platform AR37 to Expo AR37 and found Platform AR37 to be a strong establishing grass with very good tiller density. He has been impressed with Platforms’s cool season growth in a challenging wet year. Although Nick’s paddocks were late autumn planted, the ryegrass has provided four grazings over
the winter and early spring.

Similar to Nick, Waikato mixed sheep, beef and cropping farmer Donald Stobie says Platform AR37 established well and has handled the extremely wet winter. Donald’s paddock was readily grazed by lambs and produced as much feed as Excess AR37. Both Donald and Nick are interested to see how Platform AR37 handles the summer and if it does as well as trials suggest, they will be looking for seeds to plant following their summer crops.

Platform AR37 is a dense finely leaved cultivar with a late heading date (more than 12 days) fitting between mid-season Excess and very late Base. “Parentage for Platform AR37 includes a combination of elite New Zealand and North-West Spanish genetics to provide both spring and cool season growth when it is needed most” says plant breeder Tom Lyons.

The relationship between Platform and New Zealand’s premium AR37 endophyte has also been a major focus in the development of this new cultivar. Selection for endophyte compatibility and stability enables the new ryegrass to consistently deliver insect protection for major pests including black beetle, Argentine stem weevil larvae, pasture mealy bug, root aphid and porina.

The extensive breeding, selection and testing by PGG Wrightson Seeds plant breeders and agronomists have delivered two other top performing perennial ryegrasses, Base AR37 and Excess AR37. Along with Platform AR37, these three perennial ryegrasses all feature in the top five of this year’s independent NFVT results (see Graph 1 below). “It’s great to be able to offer New Zealand farmers top performing perennial ryegrasses in each of the main heading date groups; mid-season, late and very late” says PGG Wrightson Seeds National Sales and Marketing Manager, Hugh McDonald.


Excess AR37 and Base AR37 have also performed strongly in various regional NFVT summaries1. In the Upper North Island, Excess AR37 has demonstrated its suitability for this challenging environment while Base AR37 continues to produce outstanding results in the Canterbury (upper South Island) summary.

Having the right balance of paddocks with different heading dates is critical to maintaining feed quality and matching feed supply to demand. The heading date of a ryegrass cultivar is when 10 percent of plants have emerged seed heads. Dates are defined relative to the cultivar Nui heading at day zero, which is approximately 22 October. Mid-season ryegrasses such as Excess AR37 (more than seven days) and Rely (zero days later than Nui) offer an earlier ‘spring flush’ in the six weeks prior to
heading, while later heading varieties such as Base AR37 (more than 22 days) hold quality providing leafy high quality
feed later in spring.

It is recommended to sow ryegrass cultivars with a range of different heading dates to spread time of heading and reduce the overall loss of summer quality. Sowing ryegrasses with different heading dates in separate paddocks is recommended along with planting no more than 50 percent of the farm in late/very late heading cultivars to avoid early spring feed pinches.

For more information on PGG Wrightson Seeds’ range of forage grasses, contact your local PGG Wrightson Technical Field Representative.


1 NFVT Perennial Ryegrass Summary:

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