According to the land.com.au today, an area twice as big as Texas is in drought in eastern Australia, yet realtors say there's rarely been a better time to buy Aussie farmland.
The reason is beef. Exports are at record levels and cattle prices in the east of Australia reached an all-time high this month.
Prices of farms are at a 10-year low, at less than $500 a hectare, according to Herron Todd White, Australia's largest independent property appraiser. At the same time, US demand for beef has pushed cattle prices to a record, and a weaker Australian currency has made Outback farmland cheaper for overseas investors.
"It's a buyer's market, there's no doubt about that," said Tim Lane, rural director with Herron Todd White in Brisbane. "To have all these things aligning - it's very, very rare."
Among 16 key international markets for agricultural land, only Uganda and Mozambique were cheaper than Australia, Savills Plc, Britain's largest real-estate agency, said in a report last year.
Farms in Australia returned more than 15 per cent a year in the decade through 2012, Savills found. That's more than double the average return from Australia's benchmark stock index over the same period.
Australia is the world's largest wool exporter and is one of the top five suppliers of beef, cotton, sugar and wheat.
More than 70 per cent of beef produced in Australia ends up overseas. Free trade agreements struck by Australia with Japan, South Korea and China since 2014 have lowered or scrapped tariffs on beef exports, helping sales abroad.
According to The Australian Financial Review today, more than a third of the nation's farmers expect the agricultural economy to improve over the next year as solid autumn rains and strong beef, lamb and wool prices buoy confidence, a Rabobank survey has found.
Beef prices have been particularly robust with the Eastern Young Cattle Indicator up 50 per cent on this time last year.
In a positive sign for suppliers of farm inputs and machinery, one quarter of farmers intends to increase their investment in their businesses and a further 66 per cent intend to maintain their current level of investment.
On Friday, the Australian Bureau of Statistics reported that the value of agricultural commodities produced in Australia in financial year 2014 rose 5.9 per cent on the previous year to $50.9 billion.
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