Receivers put 1235ha dairy farm milking 2500 cows up for sale by international tender

Receivers put 1235ha dairy farm milking 2500 cows up for sale by international tender
The milking shed on the farm being sold by its receivers

A 1235 hectare dairy farm south east of Taupo has been put on the market by its receivers.

Taharua Farm on Taharua Rd, at Rangitaiki about 38 kilometres south east of Taupo has been advertised for sale by international tender by Bayleys Real Estate.

The farm neighbours Lochinver Station which was to have been purchased by Chinese company Shanghai Pengxin until the sale was blocked by the government last year.

Had the sale of Lochinver proceeded, Shanghai Pengxin would also have purchased Taharua Farm.

The farm is owned by Fleming & Co (as trustee of the Country Spirit Trust) which was placed in receivership in October last year.

The first report by receivers BDO listed its main creditor as ASB Bank which was owed $17.84 million.

According to the farm had been purchased for $15.55 million in 2006.

Fleming & Co is believed to have sold the farm's livestock to Shanghai Pengxin's Dakang NZ Farm Group for around $7.34 million, which also took a lease over the property ahead of its planned purchase.

However the lease is understood to expire in the middle of this year.

Dakang is believed to have agreed to pay $14.25 million for the land and remaining assets had the sale gone ahead.

Bayleys said the farm was milking about 2500 cows and in the 2014/15 season produced 519,477 kg of milk solids and was aiming to produce 700,000 kg in the 2015/16 season.

However the livestock grazing the property are not included in the sale.

The farm has four modern, 3-4 bedroom homes on it, two 80 bail rotary cowsheds, two calf sheds, a 100 tonne fertiliser bin, three bay barn and a range of machinery and storage sheds.

Water for irrigation and stock is drawn from the Taharua River and the farm has an effluent disposal system.

Tenders for the property close with Bayleys on March 10.  


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Red flag sign here, as the bankers turn the screw on the over leveraged.

Marginal land, pumice, poor fertility, cold, high costs. Runoff into sensitive water catchment. Good luck to the new owner.
I don't know who gave them consent to irrigate from the river, it never should have been allowed and things haven't got better since this report.

I remember reading about this in the very early 1990's in the quarterly magazine you used to get with your fishing license.

What's happened since then?

Belle can enlighten you better than I can.

Okay, well, given the situation with dairy, I’m curious – state-owned Landcorpis pushing ahead with a massive conversion from trees to dairy in the Waikato. Is that still a good idea, do you think?

Well, there’s— I mean, you’d be best to talk to Landcorp about the detail of it, but our advice is that they have long-term contractual arrangements that mean they have limited choices about how to proceed with respect to that project. And that’s something the Government’s digging into in a bit of detail because we do need to understand exactly what their obligations are and what choices they have…

Hamish...Landcorp sold their sheep and beef farms around lake taupo to a dairy farmer. Big time dairy farmer. He bought up n units and converted large areas. Lots more cows there now. Helen Clarke over saw it.

More to the point. How many bank liabilities (deposits) will be extinguished clearing this asset below book value? Are banks adequately capitalised to meet this contingency type going forward? With Japan joining the negative interest rate crowd it just became a whole lot easier to fund new global dairy production.

Moreover, is our NZSF going to be pillaged, then ACC, with the same consequences that Norway is staring down. Read more

Interesting article. But wouldn't you need to factor in when the orignal deposite was placed in the fund and its exchange rate at that point? It may only be a paper loss at this point in time.

Not really the point. If government decided to fund budget deficit spending by liquidating current foreign assets held by NZSF and ACC NZD/USD, NZD/EUR, NZD/JPY etc would be bought, hence speculators would jump on board to extend a possible official policy NZD uptrend.

Impossible, they Land Banked. Cannot go into receivership.

It is all a ploy to make more money.

Just wait a few weeks and all will be right again.

Just borrow negatively from Japan and soon we will all be in clover.

Hold tight, Hold fast, do not be negative, nothing can go wrong.?

Why are they increasing production in a year with a low payout. The river will be destroyed.

Did you actually see what the production was? Still expecting only 280 per cow. The previous year only 210 per cow.

I think you know the country better than me. I spent some time on Porunui when I was young and Jo Howard owned it.
What do you think the future of that country is? I don't think it has much potential as a dairy farm, especially if nutrient limits are introduced. It was bloody cold in the winter, we used to get 2.5 mm wire breaking in the cold if overstrained. I never looked like it grew much grass and the sheep were small. A lot of the pumice was big lumps especially on the flats, the hills I think were better as the bigger pumice had rolled off them onto the flats.
I was amazed when it got converted in the first place, don't know how they intend to lift production without blowing their budget and lets face it, Fert isn't cheap and they need a lot..
Love to hear your views.

Basically the only way I see such land being farmed even close to profitably is by methods at odds with either environmental or animal welfare or both, and I'm not interested in them. I'm very much a dinosaur though, I can't see the attraction of milking 2500 cows or growing bigger just for the sack of it and many days I look around and don't even see a place for me in the industry.

No dinosaur, Redcows. I see your attitudes as those of the emerging value-based future. The dinosaurs are those reckless of ecological and environmental responsibility, careless of animal welfare, etc, and dependent on oil and its derivatives. It's a system that ensures the people that need food don't receive it (can't pay for it), while those that don't need it - I mean need it - destroy their own health and that of the ecology we depend on. Perhaps one day we'll see this way of working for what it is - something to consign to pre-history. There's a tipping point in everything, and industrial agriculture - as it's practised - has passed it.

Farmland peaked a decade ago. Yes we use oil - get over it. Any evidence to back up your rhetoric? The facts are the world is awash with oil, gas and grain meanwhile the globe is greening. Who is destroying their own health? You do realise life expectancy is increasing?
Check out before venting.

There may be another way of looking at it, profile. The issue's larger than the sale of a New Zealand dairy farm, and no-one wants to read a pile of googling, but I think there are a few things we need to take on board:

‘Biodiversity loss is more rapid and more widespread than at any other time in human history.’ The Cambridge Conservation Initiative.

‘Every year we raise and eat 65 billion animals, that's nine animals for every person on the globe, and it's having a major impact on our planet. Nearly a third of the Earth's ice-free land surface is already devoted to raising the animals we either eat or milk. Roughly 30% of the crops we grow are fed to animals. The latest UN Food and Agriculture Organisation reports suggest livestock are responsible for 14.5% of man-made greenhouse gas emissions - the same amount produced by all the world's cars, planes, boats and trains. A single cow can belch up to 500 litres of methane every day. Multiply that by the 1.5 billion cattle we have on our planet and that's a lot of gas. And it has a vast environmental impact because methane is 25 times more potent a greenhouse gas than carbon dioxide.’ Dr Michael Mosley, BBC Horizon, 20th August 2014

Greening? The UN Food and Agriculture Organisation indicates the world may be losing about 1% (50,000 sq kms) of its farmland annually ' due to a combination of degradation, urban sprawl, mining, recreation, toxic pollution and rising sea levels’. Another study, not so recent, suggests almost a quarter of the world's farmland is affected by serious degradation, up from 15% two decades ago. It'd be no better, I guess, today.

Regarding oil. Right now, yes, there's a glut. But my point is that we are also eating it, via synthetic fertilizers based on fossil fuels. Much of agriculture depends on these synthetics. And oil is finite.

And health? Science fortunately has managed to keep pace with increasing diabetes, other nutritionally and environmentally influenced conditions. It's not that health's improving. It's that science is achieving a range of breakthroughs. But, again, widespread antibiotic use in agriculture is a major factor in the fast declining viability of our antibiotics. And ‘the major public health organizations of the world have said that climate change is a critical public health problem. Climate change makes many existing diseases and conditions worse, but it may also help introduce new pests and pathogens into new regions or communities.’ US Dept of Health (

I'm no doom-monger. But something, I would say, has to change.

Something has changed workingman but doomster soundbites sell a lot more advertising. Here is some data from the what has happened department as opposed to the might happen - give us more funding - department.


"Then, in about 1940, acreage and yield decoupled in the United States. Since then American farmers have quintupled corn while using the same or even less land".

"A recent meta-analysis by Wilhelm Klümper and Matin Qaim of 147 original studies of recent trends in high-yield farming for soy, maize, and cotton, funded by the German government and the European Union, found a 37 percent decline in chemical pesticide use while crop yields rose 22 percent. This is the story of precision agriculture, in which we use more bits, not more kilowatts or gallons."

"Recent reversal in loss of global terrestrial biomass. From 2003 onwards, forest in Russia and China expanded and tropical deforestation declined. Increased ABC associated with wetter conditions in the savannahs of northern Australia and southern Africa reversed global ABC loss, leading to an overall gain, consistent with trends in the global carbon sink reported in recent studies."

Not something, a well known action. Sure 1940s on we brought in mechanisation and then the "green revolution" that roughly trebled farm output for a huge fossil fuel input. Trouble is that fossil fuel output per day is a) offering a worse and worse EROEI hidden by cheap credit. b) peaking and will decline. Then there is the ever increasing use of "fossil" water that is not being replaced making framers go deeper and deeper for water to the point is it no longer economic for them to do so.

From the quote above "This is the story of precision agriculture, in which we use more bits, not more kilowatts or gallons." Note the word "kilowatt".

You seem to make and continue to make the classic mistake of looking back and projecting forward exponential growth on a finite planet.

Today we have an overhang of oil sure, 5 years from now? probably not. 10 years from now? we'll be in decline. Grain, sure we have good years but as Russia had a 1 in 2000 heat wave, lost a lot of crop. Mid-west floods etc etc so we see a 10 to 20% drop in global output due to CC while we have more mouths to feed, yes bound to end well. The greening you refer to is human made /altered land its not ecologically sound native supporting wild life. So sure we can (try to) turn the entire world into a wheat field and then its all green, there wont be terribly many species left of course.

Baseless Malthusian predictions, and comments about the weather, not supported by the above actuals nor record grain harvests and farmland area that has peaked. Where does it state planting a wheat field = greening the planet?

There's more of us that think that way than you might realise redcows. It's just that we don't get the spotlight shone on us like the large farms do. ;-)

I spent a bit of time there too Aj. Similar time frame. It was working in the woolshed for me. Been up and down that Taharua for brownies. Gee they are clever bastards. My main memories were of the shearers quarters, Wocky the old shepherd limping around, wicked frosts and those cunning fish. American owned now, run by non that side of things is a mess. I know one of the managers on Flemings. Good bloke. Apparently the chinese had huge plans. Losing Lochinvar seems to have soured things for them. I wonder if they will sell the crafar farms when their time is up with Landcorp. They certainly aimed for the challenging type of farm.

Looks like the tip of the iceberg.
The banks get out of jail card. Winston is going to have a fielday next year as the trickle becomes a flow.

Why would you pay 38k a hectare? I would have thought being a good investor you would wait till you saw the ' whites of their eyes'?
DFNZ was established in 2014 to provide Kiwi investors the opportunity to invest in dairy farming with the ultimate aim of seeking a listing onto the NZX stock exchange.


So why would investors buy at yesterdays prices and then have to put up with layers of management taking a cut? Makes no sense to me at all. It's as if there is a hidden agenda to corporatise NZ AG Inc or is it all about the banks?

Maybe because the sharemilker gets squeezed to death? It seems to me too many ppl looked at the increasing milk price and long term tax free capital gain and decided they wanted a share of that easy action....

I asked a local and Otapiri may be much like Porunui

That would make sense, it's always the marginal land that gets in trouble first, why the banks want to
off load it fast.

Aj these farms have been for sale by Kees Zeestraten. It's been reported he wanted to sell them in order to convert land at Lake Ohau :-(

Extract from the NZ Herald article

This transaction required OIO approval - As a result of the acquisition - DFNZ will begin a planned $4.3m development programme of the Southland properties, including investing in housing, draining, environmental mitigation and a new cow shed

To meet OIO criteria DFNZ agreed to make a substantial investment in the Southland farms including increasing cow numbers and milksolids production, embrace Kiwi participation and increase the viability of its other investments

Note the use of the word mitigate

Definition of mitigate
make (something bad) less severe, serious, or painful.
synonyms: alleviate, reduce, diminish, lessen, weaken, lighten, attenuate, take the edge off, allay, ease, cushion, damp, deaden, dull, appease, soothe, relieve, help, soften, temper, still, quieten, quiet, tone down, blunt, dilute, moderate, modify, abate, lull, pacify, placate, mollify, sweeten, tranquillize, excuse

That doesn't mean prevent or eliminate


the OIO waved it through on the basis NZ'ers can't or don't have the skills to increase cow numbers, increase production, build a cowshed or build a house, dig drains


yes our target cow numbers of 5000 will only produce effluent equivalent to 4000 cows


Incomprehendable, sad,idiocy.

NZ'ers cannot make a business case out of these ventures.

'Mitigate' is used in relation to farming because the only way to completely prevent or eliminate the effects of farming is to not farm. Mitigation options can make a difference. ;-)

It will be interesting to see whether or not they had studied the Southland Regional Council's Water and Land 20/20 Plan. New drainage is likely to require a resource consent. Also the nutrient setting process is due to start this year so depending on the physio-geographical zone this land is in, they may or may not be able to carry out farming the 5000 cows. A resource consent will be required for the cowshed (is this the farm where robots are currently installed?) and herd numbers will be defined by the consent.

Locals are quite wary of buying Southland farms at present because the 20/20 Plan isn't yet notified and the draft has some cause for concern.

I'm based in south Dunedin now - gone rural
Our local Mosgiel based builder is flat out week after week down in Southland building dairy feeding-barns or whatever you call them

Cripes - maybe they will also need an audience with the Pope?

Members of the European Milk Board (EMB) attended the audience in the Vatican City on Wednesday to ask the Pope for his support in their struggle for a fair and sustainable agricultural system. Read more

Fonterra has been there ;-)
When Fonterra wanted to go to 100 per cent ownership in 2008, it received the blessing of the church in Chile but final approval had to be obtained from the Vatican.

Good to have you in Otago iconoclast. I have heard some figures that suggest if payout is <$5.25 it is more profitable to reduce stocking numbers and winter cows at home. >$5.25 it is profitable to winter off. Consequently more farmers are now building feed pads (as opposed to full blown barns), reducing stock numbers (if intensively stocked) and are looking to winter at home.

Barns/feeding pads can be a double edged sword environmentally, in sensitive catchments that currently winter outside their catchments.

If you click on this article have a look at the poll down the page and see how many people think the economy is going tank. %64 think it's going to be a great crash like 1929.

Are you worried that we are heading for a Great Crash to rival 1929?

The prognosis is not good when a bunch of previously tenured academics are charged with the responsibility to fabricate money at zero cost and believe they have the solution to our woes.

The idea of monetary intervention in this fashion is redistribution; that some economic agents will benefit at the expense of others. While that “expense” is acknowledged by the monetary central planners, they feel it necessary in order to achieve economic pump priming again. Thus, those who lose out in the initial stages of QE are expected to be eventually rewarded by the full recovery (omelets need broken eggs). Ben Bernanke was (in)famous in that respect, often talking about the woes of those savers depending upon fixed income who will be richly rewarded for their pain when his theory is proven correct.

When I was chairman, more than one legislator accused me and my colleagues on the Fed’s policy-setting Federal Open Market Committee of “throwing seniors under the bus” (to use the words of one senator) by keeping interest rates low. The legislators were concerned about retirees living off their savings and able to obtain only very low rates of return on those savings…

In recent years, several major central banks have prematurely raised interest rates, only to be forced by a worsening economy to backpedal and retract the increases. Ultimately, the best way to improve the returns attainable by savers was to do what the Fed actually did: keep rates low (closer to the low equilibrium rate), so that the economy could recover and more quickly reach the point of producing healthier investment returns.

That last paragraph is tragic in all the ways that are evident right now and suggested for the upcoming intermediate term. Savers and households (true state of the labor market) not just in Japan have been bearing this burden of redistribution for more than a decade (and almost a decade in the US and Europe) and still they are forced to ask where is the recovery to reward their dictated drain? It’s all the more distressing given that question still unresolved just as concerns turn increasingly toward the “next” downturn. Why is the economy always in the initial stages of recovery so that, years upon years later, it still cannot withstand the slightest alteration of monetary genius? It stops being redistribution and takes on the proportions of unnecessary and even criminal torture. The banks must always win so that the people might in a generation or two down the road? Read more

Where are those government bonds trading?

I have driven past this farm many times, I too thought this land looked inappropriate for dairy farming. If new owners brought the land at a low enough price to make a profit with low per ha production, fine. Any lender will want the new owners to have plenty of equity to enable debt servicing at current or even lower milk prices and higher interest rates. I would imagine that that would mean a much lower price than the receivers will be looking for.

That's the root of the problem, lowering the cost of money has been inflating asset prices for a long time. Debt has grown faster than incomes and Central Banks are pricing money with measly interest rates then they will limit the decline in asset prices. That's their objective anyway, but really that's does no good for the economy in the long run.

Continual devaluation of the currency is making everyone poorer. It may help exporters but if exporters need to make the rest of the country poorer to be competitive, deflating the currency is only hiding a much bigger problem and one that cannot be fixed without much pain. Remember the late eighties and nineties! Central bank intervention is nothing more than papering over structural problems. Politician prefer that than facing the real issues.

For me John Key has lead NZ down a dead end ally, Labour was no better, its not about politics. We need to face the tough problems and stop this crazy borrow and hope for the best if we want NZ to have a healthy economic future.

Current economic theory has failed, Japan's slide to negative interest is another proof of that. NZ pinned its future to China only to be now stuck with a slowing Chinese economy hitting us hard, likely to get worse before its better. I am pretty confident the the US will see lower interest rates by the end of 2016 rather than higher, they may get a rise in in March, but their economy is slowing and was through most of 15. Fedex has this week warned of a slow down, DHL has issued the same, if they are slowing with oil prices at these lows it says a lot about the underlying economy.

The PH'ds are not all knowing and to believe that a small group of economist can see into the economic future any better than market participants holds no logic. In my mind anyway.

Mainly, negative rates in theory are a tool to spur flows into risk assets and supposedly bolster securities markets. The irony is that negative rates are damaging to bank profitability. And as the Credit downturn gathers momentum, banking profits – and solvency – will be a pressing systemic issue.

Also to prove your points..An Apple a Day...maybe far too many??!!.

I think the article is wrong...the farm known as Flemings is up for receivership sale. Taharua farm is owned by the chinese and is not for sale. Taharua was a Crafar farm.

Bayleys are advertising it as Taharua Farm. Perhaps there has been a name change Belle?

edit: This might explain it:
Yet to be announced, and also requiring Overseas Investment Office consent, is Pengxin's intended purchase of a 950ha effective dairy farm, known as the Fleming block, adjoining both the west side of Lochinver and Pengxin's 1250ha effective Taharua property.

It could all be spam, don't sent the deposit till I've checked it out.

Real estate agents arent well known for getting things right. Yesterday I saw a waikato block 185ha advertised as fattening 15000 lambs...amongst other stock....hmm I wondered what the hell am I doing wrong. Better put a deposit on that one quick Aj. Its a gold mine.

You are in luck comes with one free Penis enlargement kit. I will send deposit information, its my Bangkok account so don't worry all safe.

The story has been updated with more details about the farm's ownership and receivership.