KEY POINTS:
A growing number of Kiwi dairy farmers are snapping up farm land in Australia, according to PGG Wrightson Real Estate.
Max Lyver, manager of the company's international portfolio, said dairy farm sales in the key state of Victoria totalled about A$170 million ($194 million) during the previous 18 months, with about 40 New Zealand farmers accounting for an estimated A$100 million.
The sales were mainly additional farm investments, Lyver said.
"I do know of New Zealanders who are actually buying their second farm now in Australia having bought one a couple of years ago."
More farmers were shopping for property in Australia, he said.
"The reason is I guess because of the high cost of entering the New Zealand dairy industry is forcing, or encouraging, a lot of people to look outside and they're looking in Uruguay but they are also looking in Victoria in particular because it has so many similarities to New Zealand."
Fonterra this month told farmers that this season's payout would be at least $7 per kg of milksolids, compared with $4.46 the previous season.
Westpac expected the final payout to be $7.20, meaning the dairy sector will bring the best part of $4 billion more into the country this season.
The higher payout was encouraging more people to look at dairying as an investment and suitable land in Australia could cost between a third and half the price of the equivalent in New Zealand, Lyver said.
Chairman of Federated Farmers dairy section Frank Brenmuhl said investing overseas was getting more common as contacts and information became more widespread.
"There is a warning here for New Zealand. One of the reasons why some farmers are leaving here is because the cost of doing business here in New Zealand is getting too high."
NZX-listed NZ Farming Systems Uruguay, which floated on the stock exchange in December, was set up by PGG Wrightson to develop dairy farm operations in Uruguay and at the time of listing had bought up 30,980ha of land and held 20 farms.
Lyver said New Zealand farmers were also investing in Argentina, Chile, the south-west of the US and looking at Europe, but they were not the only nationality on the move.
Irish, Danish and Russian farmers were buying farms in the UK, while the British were heading to Canada, Australia and New Zealand.
"There's an amazing land-go-round going on at the moment and what I call a global flow," Lyver said.
There was a shortage of experienced farm workers in Victoria and good managers could get attractive salary packages, he said.
"A good skilled farm manager looking after a large herd in Australia could earn in the order of A$100,000 a year, plus a car, plus a house."
A Federated Farmers and Rabobank report released in January and based on a survey conducted in August last year said a manager of a relatively large dairy farm in New Zealand earned a total package, comprising salary and other benefits, of $70,529.
Dairy farming conditions were different in Australia, with higher temperatures and a two to three month dry period during the summer, but it was easy to adapt, Lyver said.
Australia had a greater reliance on supplementary feed, which could drive production higher per cow than an all-grass system in New Zealand, he said.
PGG Wrightson Real Estate was also getting interest from sheep farmers thinking about switching to dairy farming, Lyver said.
"Obviously dairy has plenty going for it at the moment and entry level for a dairy farm in Australia is a lot easier to manage than the equivalent in New Zealand," he said.
"It is likely that the transtasman trend will expand to include sheep farmers looking at a double switch - into dairy and across the Tasman."
The company is holding a series of seminars nationwide starting on Monday to discuss opportunities in Australia.
OZ HOLDINGS
* Kiwis are dominating sales of Australian dairy farms.
* Farmers are taking advantage of a lower cost of entry.
* Australian land can cost a third the price of New Zealand.
* Farmer leader warns the cost of doing business here is too high.
