farms to increase efficiencies of labour, machinery and management skills. Sell & lease back Sell some land to an investor, lease back Olam Almonds the land and with the released capital Australia Pty Ltd sold (from the sale), expand the farming and leased back land business by leasing more land and from group of purchasing additional stock to build up investment funds the sheep flock. (2013). Grass Patch farmer sold leased back from Westchester, a US pension fund (2014). Equity investment Investor(s) contribute equity to the farm Equity partnerships business. A proportion of profit is across NZ dairy industry. distributed to investor(s) as dividend. Physical involvement may Investor may choose to purchase more range from equity interest land to increase the size of the only (‘investor’), equity enterprise. Farmer manages the interest and active enterprise for a fee and receives profit involvement (‘managing distribution. partner) or ‘manager’, whose employment is separate from shareholding. Leasing over Sheep producers lease stubble, WA farmers sowing summer/autumn moderately saline or marginal saltbush, tall wheatgrass cropping land from crop producers as and other grasses as a alternative options for feed over summer feed source in marginal and autumn at a lower cost to grain feed. cropping areas. Contract lamb An investor, which could also be a Allied Beef, QLD & NSW production processor, broker or end user, Pork industry in WA establishes breeding stock to a high standard that meets specifications of high value customers. The investor owns the breeding stock and puts them on the lamb producer’s property. Producer looks after the sheep and grows out the lambs to specifications. Investor pays producer a fee that covers land, labour and feed costs plus a margin. Joint ventures (JV) A joint venture can allow individuals to Liveringa Stations Beef combine resources but retain ownership Pty Ltd, a JV held 50/50 to create larger operations. The lambs by the Hancock are divided at an agreed ratio (based on Prospecting Group and cost contributions) and sold separately Dowford Investments by the respective parties. Balance sheet (parent of Milne and earnings of each JV partner are kept Agrigroup) separate for taxation and ownership purposes.
farms to increase efficiencies of labour, machinery and management skills. Sell & lease back Sell some land to an investor, lease back the land and with the released capital (from the sale), expand the farming business by leasing more land and purchasing additional stock to build up the sheep flock. Olam Almonds Australia Pty Ltd sold and leased back land from group of investment funds (2013). Grass Patch farmer sold leased back from Westchester, a US pension fund (2014). Equity investment Investor(s) contribute equity to the farm business. A proportion of profit is distributed to investor(s) as dividend. Investor may choose to purchase more land to increase the size of the enterprise. Farmer manages the enterprise for a fee and receives profit distribution. Equity partnerships across NZ dairy industry. Physical involvement may range from equity interest only (‘investor’), equity interest and active involvement (‘managing partner) or ‘manager’, whose employment is separate from shareholding. Leasing over summer/autumn Sheep producers lease stubble, moderately saline or marginal cropping land from crop producers as alternative options for feed over summer and autumn at a lower cost to grain feed. WA farmers sowing saltbush, tall wheatgrass and other grasses as a feed source in marginal cropping areas. Contract lamb production An investor, which could also be a processor, broker or end user, establishes breeding stock to a high standard that meets specifications of high value customers. The investor owns the breeding stock and puts them on the lamb producer’s property. Producer looks after the sheep and grows out the lambs to specifications. Investor pays producer a fee that covers land, labour and feed costs plus a margin. Allied Beef, QLD & NSW Pork industry in WA Joint ventures (JV) A joint venture can allow individuals to combine resources but retain ownership to create larger operations. The lambs are divided at an agreed ratio (based on cost contributions) and sold separately by the respective parties. Balance sheet and earnings of each JV partner are kept separate for taxation and ownership purposes. Liveringa Stations Beef Pty Ltd, a JV held 50/50 by the Hancock Prospecting Group and Dowford Investments (parent of Milne Agrigroup)
Concepts%20for%20alternative%20investment%20%26%20financing%20models%20to%20expand%20sheep%20production%20in%20WA.docx