NZ Super Fund appoints FarmRight to manage dairy investment, buys first farm

NZ Super Fund appoints FarmRight to manage dairy investment, buys first farm

By Gareth Vaughan

The New Zealand Superannuation Fund has appointed FarmRight, a South Island-based dairy farming management and consultancy company, as an investment manager.

The Super Fund has also bought a dairy farm in West Otago, about 100 kilometres west of Dunedin, as it moves to execute its rural land strategy, outlined by Super Fund CEO Adrian Orr in this Double Shot interview.

FarmRight, which has offices in Lumsden, Lincoln and Otorohanga, has a portfolio of 42 dairy farms covering more than 12,000 hectares and 34,000 cows.

Matt Whineray, the Super Fund's general manager for investments, said that FarmRight was chosen because of its experience, track record and strengths in risk management and in adding investment value through making operational improvements to dairy farms.

“We have appointed FarmRight after an extensive due diligence process, which included assessments of their ability to manage, among other things, profitable pasture-based farming systems, costs, health and safety, animal welfare, environmental compliance, and financial budgeting and reporting to the standard we require,” Whineray said.

FarmRight CEO Jim Lee said the Super Fund's long-term investment approach was well suited to dairy farming. Lee said the first purchase was a quality farm acquired for a good price.

Lee told interest.co.nz the farm was being bought from an individual or family but he wouldn't provide any specific detail on the seller, location or price being paid. The unconditional deal is due to settle on June 1.

FarmRight, whose website says it has converted 17 properties into dairy farms since June 2007, expects that once under Super Fund ownership the 250 hectare farm will milk about 630 cows.

More farms in sights

Lee said FarmRight was also already looking at other potential purchases on behalf of the Super Fund.

"We have got offers in on two more properties at the moment and we are looking pretty seriously at another three," said Lee. "That doesn't necessarily mean those deals will complete."

FarmRight was looking for properties with a good return on assets plus the potential for capital appreciation through "either improving the property or if and when the market picks up again in the near future."

FarmRight was founded in 2000 and has about 35 client groups invested in farms. Lee said the firm has about NZ$500 million of assets under management. Existing and retired farmers plus rural professionals comprise about 80% of FarmRight's investors, Lee added, with some offshore individual investors. The firm has no major institutional investors.

He said it was "particularly pleasing" to be helping a local institutional investor buy substantial pieces of New Zealand rural land with the returns set to ultimately assist in meeting the future cost of New Zealand Superannuation.

FarmRight’s mandate will eventually see the Super Fund own or part-own a portfolio of New Zealand farms, as part of its globally focused rural land strategy. This calls for the Super Fund to potentially partner in the buy up of clusters of farms as it moves to invest between NZ$300 million and NZ$500 million over three to five years.

Although this rural push is a global rather than merely New Zealand one, Orr told interest.co.nz in the Double Shot interview that New Zealand was one of the best farms in the world so should "get a slice" of the investment.

Key welcomes Super Fund move

Prime Minister John Key welcomed the Super Fund's move into dairy farm ownership.

"I think it reflects the fact that the dairy sector is a very powerful and fast growing area for the New Zealand economy," Key said.

"We saw the Fonterra (internet) auction up 7% last night, those commodity prices are extremely strong. The outlook, providing everything holds together in China, is a very rosy one so I'm not surprised they're investing. It's an area where there's real potential gains."

The Super Fund's dairy push comes as China's Pengxin International Group strikes a deal conditional on Overseas Investment Office approval to buy 16 central North Island Crafar dairy farms from receiver KordaMentha and as German interests buy 3314 hectares of dairy and dairy-conversion land.

Meanwhile, the Super Fund has been touted as a potential buyer of a controlling stake in Fonterra's biggest supplier Dairy Holdings, which is on the block after the demise of South Canterbury Finance.

(Updates add comments from interview with FarmRight's Jim Lee, comments from PM John Key, paragraph on Chinese and German interest in New Zealand dairy farms and sentence on Dairy Holdings).

We welcome your help to improve our coverage of this issue. Any examples or experiences to relate? Any links to other news, data or research to shed more light on this? Any insight or views on what might happen next or what should happen next? Any errors to correct?

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Well looks like my supers gone. This is transferring debt from the banks onto the taxpayer. 

As Bob Jones correctly notes, institutional investors normally buy in at the top.

The move does appear to include aspects of a bank bailout.

From time to time on CNBC , a professional  fund manager comes on who's gonna increase his exposure to equities , as the worst of the GFC appears to be past us .....

..... The Dow closed above 12000 last night , slightly less value there now , than it's credit-crunh low of 6600 ........ And it's a debatable point that the worst of the GFC is behind us .

The money the Fed is printing has to go somewhere - pick your bubble: Equities definitely, commodities are increasingly popular, property definitely still out of favour unless it is magical i.e. it produces commodities.

debateable amongst crank economists or people emotionally tied to their viewpoints, but not among the mainstream economic profession.

Being part of the mainstream economic profession i.e. neo-classical (think Roger Douglas and 8% compounding returns doubling wealth every 9 or 10 years forever) is something I would be keeping quiet about.

You weren't seriously expecting there to be a super for you Aj, regardless of this? ;-)

Do Farmright manage any farms down your way that you are aware of?

This move results from bank pressure to protect their rural land bubble. You can be sure the fund will pay what it is told is the "market value" based on current prices...which are based on Bernanke printing....and panic buying...to escape inflation..caused by Bernanke fraud.

 "Lee said the first purchase was a quality farm acquired for a good price." good for whom and why is it a secret?

IMO the bank bailout aspect is a by-product, not the intent. John Key repeatedly offered investment funding to Fonterra prior to the farmers vote on share trading.  He appears to be really keen for it to remain in NZ hands.

As Fonterra threw out listing on the stock exchange what other avenues are open to the govt to get in and ensure Fonterra, especially,  remains a NZ company?  Buy farms.  I will be surprised if you see any of the NZ Super farms supplying corporate processors.

"I will be surprised if you see any of the NZ Super farms supplying corporate processors."

So, you are suggesting that rather than aiming to maximise returns these purchases are to be managed to prop up Fonterra by guaranteeing it milk supply?

Perhaps the government sees it as investing in a 'strategic asset'.

Perhaps, but are governments good at picking long-term winners for the country? Or best at looking after their re-election prospects?

The farm purchased was originally converted by Howard Paterson.It was then sold by the Paterson interests and was not used for dairying by the next owner.It was subsequently purchased by someone with the skills to restablish it as a milking platform,and it's current production and management is a credit to the present vendors.Milking platform prices have regressed some 25% from their peak,and at present with the fundementals for dairying stacking up,I believe this farm is a wise purchase by the super fund.

Red dog, which begs the question, if its running at peak performance then how much room for improvement? Wouldn't you be better buying a low performing unit and improving management especially if you are buying on a per kg milk solids basis?

Im sticking with my 'their stupid assumption'.

Do the maths Aj. West Coast farms are cheaper than most other areas.  If they paid $25/kg, have no debt, their return would be $7.10/kg if Fonterra supplied this season, and not a lot less if it is Westland Co-op. I know of farmers on the Coast who have FWE less than $3.50/kg.  But even at $3.50kg for FWE you are still looking at a 14.4% net. They don't need to increase production to make a reasonable return.

FWE? does that include wages for staff and owners?

Mike it does include wages for staff.  It is a family farm so owners don't take wages, just drawings out of profit though that is very minimal as they have other off farm income that they live off.

CO, I had to ask a friend about your figures. I may not know much a bout dairy returns but I know where to go to find out.

>>>>>>>

 

Flaw in argument of Casual Observor:

 

Assumes $7.10 as payout this year. Not June to June and shared up. What are odds for when you DO retire in 15 years for dairy products beating the normal trend line of increases.

Assumes $3.50 FWE per kg MS. Inflation in regulatory costs and imported fert and fuel plus associated services and products that flow from from those will drive that higher very quickly. Think $4+ (MAF average is already $4+ and that is farmer intention for costs rather than true maintenance "hold" costs)

Assumes purchase $25/kgMS  - does this include all stock, plant and machinery (and shares if Fonterra is the company of choice for an SOE?)?

 

The other problem is that the MS production may not be at most efficient resource allocation level.

 

This may mean that doing a better job of this may well decrease MS which although making more money will increase the kgMS/kg debt level (or increase the cost/kgMS price).

 

So CO has looked at the high end of income and the low end of costs with no attempt to look at risk of either changing or worse, of both moving closer towards each other at the same time.

 

This would seem the most likely scenario that I would see and alters the rather simplistic 14.4% return rather dramtically very fast.

Ah, yes, I did take a rather simple view of some things - was in a hurry to go to a Fonterra farmer meeting ;-)

Assumes $7.10 as payout this year. Not June to June and shared up.

Banks like to see a budget as well as cashflows reports.  I am working on a budget, not cashflow, basis. I am aware of fluctuating prices for dairy produce - when it is bad it is horrid, but when it is good it is very, very good. :-)

Think $4+ (MAF average is already $4+ and that is farmer intention for costs rather than true maintenance "hold" costs)

I am a dyed in the wool believer in low cost, high production farming.  I thought I was quite generous at $3.50 for FWE.  I was speaking to a large farm owner at the meeting today and like us they are an all grass (i.e. no pk, maize etc) farmer and we were commenting that even at $5 we would still be making a profit as sustainable profit is our driver, not production, though funnily enough you can get high production from a low cost farming system.  Our own farm FWE for both us and our sharemilker is $2.50kg/ms and is usually lower ($2.20) but we spent quite a bit on additional r & m because we had to spend our surplus on something.  If a farmer has FWEs at $4 they need to seriously revise how they are farming, unless highly indebted, and even then my comment still stands.

Assumes purchase $25/kgMS  - does this include all stock, plant and machinery (and shares if Fonterra is the company of choice for an SOE?)?

Ah, now stock, and machinery is what I didn't consider! I should have:-( I would expect Fonterra shares to be included at $25kg/ms.

This may mean that doing a better job of this may well decrease MS which although making more money will increase the kgMS/kg debt level (or increase the cost/kgMS price).

True, but equally it may not.

The highest cost for farms, after debt servicing (and note I worked on an assumption of no debt) is fertiliser, though there are some soil types where there is a minimal fertilser requirement - not sure what the story is on the Coast. 

I am also working on an assumption of $25kg/ms when they may have bought it for $20.  If they paid much more than $25kg/ms then I would say that the seller did well.

As a starting base, $4kg/ms for FWE is way too much to be sustainable.

CO, Feriliser on the coast.

Think 2 m + rainfall.  Think high leaching environment.  Think low, p, k and s and on some converted "flipped" or "humped and hollowed" no micronutrients either.  A standard ravensdown maintenance programme (and im not saying this is the best or im advocating it) would be around 600 kg 15% potash sulphur super over 3 dressings per ha per year.

 

Development blocks would start with a pakahi starter mix  (which is based on super + cu, se, co, mo) at around a tonne per ha to get fertility up.  Of course this results in a huge amount of SO4 2- leaching and the associated dragging of cations mg 2+, K+ etc. 

 

Very hard area to get Mg levels high enough (therefore animal health implications) and K+ leaching (even though a cation has a very large ionic radii therefore weak attraction to soil surface) therefore need lots of K which inturn reduced CA and MG animal uptake which then leads to....

Love the coast but not the easiest place to get fertility right.  Think more RPR and elemental sulphur and your going down the right track - but ravensdown won't like you very much and they have by far the largest market share there

Got to go shift the cows off the rape...

 

So Aj/Colin, where exactly would you prefer they invested our money? The economics of dairying are looking pretty good right now, the Chinese and Germans seem to think so anyhow.

 

The fundamental argument is that a government borrowing money to "invest" for retirement is stupid, risky and inefficient.

If we don't have money to invest, don't borrow it to speculate. But of course our government and funds managers are so much better and smarter they will outperform the markets and more than cover costs.

The Chinese government does have money to invest, and putting it anywhere better than US government debt makes sense - for them a poorly performing investment is better than an absolutely stupid one.

But are they borrowing Colin, or just changing their asset mix?

The Super Fund is a government asset, as are the SOE power generators. The government is definitely borrowing money as they say to keep up entitlements.

The government does intend changing our asset mix - selling power generators, but keeping poor performing SOE's such as Landcorp and speculative assets like the Super Fund.

Colin,

Ironic eh. Govt tells us we are massively in debt and yet we have the money to invest in farms. It's just a money-go-round with fees whipped off the top all the way through. 

Surely we should be liquidating the Super Fund and paying down debt? 

"Surely we should be liquidating the Super Fund and paying down debt?"

That makes sense to me, but it would mean less room for political leverage/paybacks.

 

 

Dominique Strauss-Kahn, the IMF's chief, said the economic rebound across the world is built on unstable foundations, with many rich nations still strapped in job slumps while the rising powers of China, India and Brazil already facing the threat of overheating. "It is not the recovery we wanted. It is a recovery beset by tensions and strain, which could even sow the seeds of the next crisis," he said.

 

http://www.telegraph.co.uk/finance/globalbusiness/8296987/IMF-raises-spe...

I have a problem with this because I am believer in small businesses which is what most farms are. Im a believer in private enterprise and in the landowning middle class. I dont want to see us corporatised and landowners become wage earners and jobs shift to head office. Corporates  use their power to bargin with the meat works the milk companies right down to the silage contractors and workers. They wont get the accounts done by the local firm and that goes for legal advise and large machinery purchases. I forgot to add that the profit also leaves the local community.

 The property owning middle class I always thought was why we had a stable democracy, I guess we get to find out if im right or not.

This challenges my fundamental beliefs in the way the market should function, i look to the future with trepidation and fear. 

I dont disagree with your idealism Aj but surely in the real world there is nothing stopping a (NZ) corperate investing in NZ  farmland and probably never has been. Historically they havent wethered the downturns very well with their more top heavy management structures  and this time may be no different. Maybe family farmers will pick up the pieces once the corperates have invested a bucket load of money on all the bells and whistles and walked away when as you predict the bubble bursts.

Is it a workable proposition to require every adult immigrant intending permanent residency to bring with them their (US) IRAs, 401(k)s, (AU) compulsory super (ie roll it over) into NZ Kiwisaver, and if not make it a mandatory requirement the price of entry and residency is $4000 per year for every year they are over the age of 21, paid into kiwisaver? Will help buy some farms.

Check out the census-population-demograhic statistics for the last 10 years and you will find some interesting changes occuring. "originals" are being outnumbered rapidly.

 

This highlights why we should close the NZSF and use the money to repay our debts. The NZSF is being used for political purposes. Interesting that this was announced on the same day as it was announced that German interests purchased $100m of land down South. As the recent report by McKinsey highlighted, the period of cheap money is over and we are in for a period of sustained higher credit costs. Absolutely crazy for the Government in this environment to borrow on international markets and then to invest in illiquid long-term assets such as farms.

 

FYI, I have updated the story with comments from an interview with FarmRight CEO Jim Lee and comments on the Super Fund's move from Prime Minister John Key.

The question Id like answered is; how does it benefit the  NZ economy having the super fund owning this farm, rather than a young farming couple?  The money that once flowed into the economy now goes to a super fund run in a major city, this is like eating our own arm. We are run by a bunch of morons who obviously dont have a decent idea between them.

  I think you mean:

how does it benefit the  NZ economy having the super fund owning this farm, rather than a mortgage originated  from a foreign bank?

At least the super fund are making this purchase with cash so its straight equity.  And it actually shrinks NZ's net foreign liabilities line.

Full equity funding also fettles the 'borrowing cost" issue you have alighted on previously, and one assumes they will be employing local NZ'ers to manage the farm on a salary. Salary income isn't all bad - there's a lot to be said for income stability, although of course you can't claim tax deductions on every single item you may wish to purchase!

250ha, 680 cow farm is not likely to be owned by a young farming couple Aj.  With FarmRight managing it, it is more likely to be employing motivated young kiwi farmers.

One of the biggest problems looming for the dairy industry is the lack of 50/50 sharemilking jobs.  If the Super fund via FarmRight are keen to employ some 50/50 sharemilkers on thier farms, it will be of considerable benefit to the industry's young farmers.  Whether nor not that happens, of course, remains to be seen.

 

CO what talented, motivated young couple are going to want to work for the likes of Super Fund/Farm Right. Such jobs in the dairy industry are hard work, and seen as stepping stones. If such corporate know alls start buying up all the farms for more than there productive value (given rapidly inflating FWE starting at a lean $3.50), where is the stepping stone? I agree with you an AndrewJ, more 50/50 jobs to provide worthwhile incentives, and means for motivated NZ's to get a stake in the land and generate productivity, not inefficiency ie top heavy corporate ticket clippers.

Finding someone who wants to work on the Coast may be more of an issue Omnologo ;-)

A FarmRight managed farm boundaries ours.   At one time FarmRight were the 50/50 sharemilkers and employed managers - not very successfully. 50/50 sharemilkers are among the most progressive and motivated people in the industry.  We need them desperately, though I have been told of banks telling farmers with 50/50's the farmers have to buy the herds and go back in to the shed themselves.  This is happening now.

At this point in time I am willing to wait until I see what happens with NZ Superfunds farms before getting too set in my opinions.  I am not a fan of corporate farms, never have been and never will be. For now I will give NZ Super fund the benefit of the doubt.

Farmright will not be employing motivated young Kiwi farmers either, judging by their history. They will take keen, but underexperienced staff from wherever they can get them, and burn them out after a few months. They will certainly not employ sharemilkers.

There is nothing positive for the dairy industry in this move other than keeping farm prices from sinking to their true level- if that can be seen as positive.

Sorry, i thought the super fund was funded with Government debt.  So the super fund has cash while our government borrows 300 mil a week. Im not buying your argument.  

 Another way of looking at it would be. The Aussie banks lend huge amounts to NZ Ag, our Government borrows and buys debt back using the super fund as the vehicle. The winner is the banks who lend too much to farmers based on capital and now get a 'get out of jail free card' while the tax payer foots the bill and NZ farmers wishing to get into farming still cannot afford to because farms are too expensive. We are becoming masters at kicking the can down the road.

"We are becoming masters at kicking the can down the road."

And militantly ignorant regards cutting through the crap.

Dont believe the farmright spin, their farms are as out of control as the worst. The superfund dudes have been sucked in by the talk the talk. Would prefer to see farmright walk the walk. They need to get their backyards in order.

"Matt Whineray, the Super Fund's general manager for investments, said that FarmRight was chosen because of its experience, track record and strengths in risk management and in adding investment value through making operational improvements to dairy farms.

“We have appointed FarmRight after an extensive due diligence process, which included assessments of their ability to manage, among other things, profitable pasture-based farming systems, costs, health and safety, animal welfare, environmental compliance, and financial budgeting and reporting to the standard we require,” Whineray said."

So what do you think about the Super Fund's competence?

Interesting question there Colin. :-)

I too like Belle, have heard some stories about FarmRight. 

Well Colin, the suits always know how to portray themselves as great, thats how come they get to wear the suits and I get to wear redbands.

Superfund competence? I really dont know. Its a bit hard to find all the dead when they are hidden in gullys. Did the Superfund go looking in gullys? I think they wouldnt have got past the first cowshed, marvelled at its magnificence and returned to the big smoke.

My guess, Farmright bosses try hard... however same old same old, when you are farming you have to have an ownership presence on farm. One of the corporate blocks near me, has not made a profit in all the time I have lived here. It has gone through all sorts of corporate ownership. It is a huge block, natural fertility, good rainfall and weather, yet has been poorly managed by 3 different corporates. Now it owes millions and millions... with a future of fuel UNreliability how will it ever pay that debt.

Banks have got a get out of jail card.

Andrewj, agree with your last comment. If you want to know what Farm Right bugets are "going forward" click on the link and have a look at Pahia Property looking for investors. $1.20 taken of payout for contract milker wages. They also don't mention retention by Fonterra.

The shame of it all is that farmers will be more pressured by banks to sell, and banks will be sucking up too Farm Right and making properties available and those guys that were funded into conversions will be gone and won't see the fruits of their labour. Wasn't that long ago that Keys said that Govt shouldn't be in the business of farming and a big ? mark over Landcorp.

The farms should be put into a ballot system for young 50/50 guys to have an opportunity. Their motivation is different.

 

A number of our friends of past got into their farms off the ballot system.  Harder workers would have been hard to find.  In qualifying they broke in some pretty unpleasant country as farm managers.  I oft wonder how many of them are now the ones who are overleveraged.  Not that that says anything negative about a ballot system - it was a wonderful opportunity for those young families prepared to put in hard yards. 

Farmright would not be my choice of farm consultants.

The West Coast is not necessarily the cheapest area in which to purchase a dairy farm.

Whether the West Otago dairy farm is at its peak performance I cannot say without posing a question to informed sources.

Regardless of whether it is or is not,at a consideration of under $30 per kg of M/S,and if the current levels of payout can be maintained,the fundamentals of  investing in it are sound.

I prefer it as an acquisition to playing around in the sharemarket both in terms of risk and because it is NZers buying NZ land.

For the record Janette,the vendor of the West Otago Farm is under no financial pressure and is rebuying.

 

 

One benefit of dairying on the West Coast is being able to supply a co-operative that still behaves as a co-operative.

FarmRight's performance in farm overseeing and farm management in Southland over the last six years can only be described as woeful.The vast majority of conversions that they over saw ran way over budget,and the projected returns from on going management  of existing farms were non existent.NZSF obviously did no due diligence on FarmRight and the old adage bullshit will always baffle brains is entirely appropriate.I wouldn't let them run an ice cream parlor. 

Red dog, thanks for that info.

omnologo.didn't West Coast  co-op make a decision to retain $1 from payout to help with recapitalisation and made the cashflows for suppliers difficult and put some suppliers under  financial pressure so I understand. I hope the super fund investment works out but I am always a big skeptical when a coporate model of business is applied to farming. Power point presentations are only as good as the info put in them.

NZ Super has been performing pretty well in returns from what I gather. They should have been able to negotiate a pretty sharp price in a stagnant market. 

You have to ring-fence NZ Super's assets from the Government coffers otherwise the temptation would be to suck money out of it in bad times to the detriment of future generations. A good investor should be able to beat the interest rates offered by a stable sovereign country in the long-run.

Janette I think suppliers of all dairy processors were sweating the year Westland retained so much. That same season there was a run of capital from Fonterras’ balance sheet, which the chairman chalked up to a drought, but contributors to this blog suggested 'share gaming'. The difference is Westland operates a more traditional co-op model where shares are 'nominal' in value and capital needed for operation/expansion is through retained earning. With the formation of Fonterra it seems or industry leaders and politicians convinced shareholders that a more corporate model is better suited to growing the business. A result was share price 'estimated' based on projected earnings/ value etc. This made supplying shareholders feel rich (eg Crafers and co), pushed the price of farms up, and resulted in some unethical manipulation from those in the know.

Fonterra's balance sheet is a joke,when you consider that they have 2.9 billion dollars of assets in intangiables mainly Brands and goodwill.50% of milk in Aussie is now sold under homebrands labels.Fonterra doesn't include in its balance sheet the 1.3 billion dollars of liabilities to farmers for payout  in its calculation.Their accounts makes South Caterbury's look good.

FYI, new story on the NZ Super Fund's farm buying plans here - http://www.interest.co.nz/rural-news/nz-super-fund-doesnt-want-be-new-ze...

why doesnt it just take over landcorp

Marcf, I have it in very good authority that the govt sees landcorp as an asset pool for treaty settlements.

SS, Really?  what good authority is that? Also, who was running the Crafar farm and who owned the cattle that has recently been charged by MAF?

Ma'am. I dont really feel at liberty to say from exactly whom the comment came from as it was off the record. It was however a high ranking cabinet minister and made within the last month. Having said that, its probably not rocket science to work out that there must be some such strategic rationale for the crown to have capital tied up in a  collection averagely performing farms. 

"strategic rationale"? That implies it makes some sort of sense - stop kidding yourself.

I think it is a pure case of the politics behind being re-elected.

Colin, I think it more the officials/advisers who are holding this line.  Read my comment below - this thinking has been around a lot longer than the current government.

SS Many years ago our local (at the time) Landcorp office was conducting a scoping exercise on holding/selling/ etc their farms.  We heard about it and wrote to them registering our interest in buying part of one should they decide to sell.  We got a reply back saying they were going to hold them.  On talking to the local manager, they said that word was they were holding htem for treaty settlements.  That was a while ago and I have no reason to doubt the same doesn't still apply, so I agree with your comment.

That must have been a fair while ago CO.  It hasnt worked like that for many years, infact decades.  If it does, please let me know guys!  CO, can you answer the above questions regarding Farm Right and MAF? 

Twas less than 20years ago Ma'am. Sorry can't answer your question.  I thought the MAF charges predated the receivership so assumed it was the Crafars.  But I was also taught never to make assumptions, so stand to be corrected.

FarmRight remind me of that poem by Henry Wadsworth Longfellow:

........when she was good, she was very, very good, but when she was bad she was horrid.

IMO they grew too big too fast without the staff and infastructure to support the growth.  Farming successfully requires a very 'hands on' approach. If that isn't there, especially in overseen management situations, things can get bad very quickly.

The 'bad' bit is right, but not sure about ever being very 'good'. FarmRight have a shocking record down south with regard to farm management.  It's ludicrous for the Super Fund to say that after due diligence FarmRight was the best farm investment vehicle they could find.

Anybody with any experience in SI dairy farming -from lowly worker to interested observer- could have given a more realistic perspective of what their brand of 'farm management' means to a farm; low level of development and investment; limited asset maintenance; chronic underfeeding and overstocking; high death rates and low standard of animal welfare and care.

Investing in dairy farms makes sense; this approach does not. I sense other reasons for this unlikely liason.  

Ma'am, I cant say for sure, but I think the charges relate to the investigation MAF did after the Benneydale affair in 2009. MAF did a stock take of all the Crafar farms when the Minister of Agriculture got in the play . In this investigation MAF found a large number of animal welfare problems. It was a similar time to the recievers being called in. Names and farms isnt in the media yet I  believe.