Wine grape, citrus driving stability in Mildura's agricultural property market
Vineyard sales in Victoria's Mildura region are expected to strengthen on the back of farm gate prices for grapes and continued demand for local citrus fruits overseas according to Herron Todd White.
In the May report HTW noted the pending sale of a Riverland property in South Australia will show over $20,000 per hectare (excluding water licences) for a high standard vineyard, reflecting an increase of around 50 percent over the past two years.
"The wine grape harvest has wound up for the year, with most growers feeling a greater sense of optimism than they have for many years," HTW said.
"Growers are reporting that farm gate prices for red varieties were generally around $400 per tonne and for Chardonnay around $300 per tonne.
"Larger growers can make a profit at these levels and we expect to see vineyard sales strengthen.
The citrus harvesting season will commence in the first week of May, with reports of continuing strong demand from the key export markets of China, Japan and USA. An average size crop is expected.
"There is currently a two year wait for citrus trees, with nurseries unable to keep up with demand.
"The recent sale of a citrus property at Ellerslie, just to the north of Mildura, showed levels of around $30,000 per hectare (excluding water licences) and exceeded most people’s expectations.
"The buyer was however motivated by the higher returns currently being generated and aware of the long lead time to source and establish new trees.
"Good rains over the past week have resulted in the best autumn break for many years.
"With wheat prices continuing to languish, yields will be the key again this year and the early break provides an opportunity for farmers to at least start the season with confidence. A large scale farming property, Petro Station, which has approximately 9,000 hectares of cleared land and is located approximately 45 kilometres north of Mildura is currently being advertised for sale and will be a good litmus test of the market.
"The recent sale of a relatively small Western Division grazing property, Mazar Station, located 130 kilometres south of Broken Hill, highlights the strong demand from existing landholders in the region for additional country.
"The agent reported over 20 inspections and the sale price of just under $70 per hectare will equate to around $340 per DSE for a property with only modest building improvements and a relatively isolated location.
"Other sales reported include the Eulo/Kinross aggregation between Pooncarie and Menindee apparently at strong levels, whilst a report of the sale of Gundalundy Station in the Ivanhoe/Mossgiel area will show unprecedented levels for this area when the sale settles for open bluebush and grass plains country."