Sizeable beef production farms go up for mortgagee sales

Two large North Island cattle farms are on the market for mortgage sale after growth plans to create one of the country’s biggest bull fattening operation were scuppered by previously low commodity prices.

The farms – with a combined size of almost 1000 hectares – were located just a few kilometres apart in Northern Manawatu. Arata Farm was owned by Capehorn Land Partnership. Its sister property in Nitschke Road was owned by the M R Nitschke Trust.

Both companies were linked to Capehorn Farming Company Ltd which was placed into receivership at the end of 2010. Now both properties are being jointly marketed for sale by Bayleys Lower North Island and Property Brokers – with individual tenders on each of the farms closing on May 26.

A report by receivers PricewaterhouseCoopers says growth plans by Capehorn Farming Company Ltd saw the enterprise operating a huge bull fattening business – with some 11,000 head of cattle under its management across some 38 leased properties across the Lower North Island

“The company had undergone significant expansion in recent years. Along with this expansion the company significantly increased its overhead costs – taking on a number of lease properties,” the report said.

“Management of the company advise that Capehorn Farming Company suffered significantly due to a low beef price schedule over the 2009/2010 season. The company also suffered over the recent winter – with a large number of stock losses.”

The marketing agents report that it was rare to have two such large beef finishing operations in such close proximity come onto the market simultaneously. Both farms were being sold as ‘land and buildings only’ without stock.

“The option is there for purchase as either individual units, or as one combined offering to take advantage of economises of scale from a supplier perspective – and the receivers are willing to look at all options which come through on the tenders,” they said.

The Nitschke Road farm is 527 hectares, divided into 51 permanent paddocks – with 133 hectares subdivided into intensive farming ‘cells’. The land contour varies between gently undulating pastures through to some steeper sidings.

Two homesteads are situated on the property – a five-bedroom homestead built in 1942, and a three-bedroom house which has undergone extensive refurbishments over the past two years.

Farm buildings and stock facilities on the farm include a four stand woolshed, two four bay implement sheds, and a former woolshed converted into an indoor cattle yard. Watering troughs throughout the paddocks are sourced from six fenced off dams.

Meanwhile, sister landholding Arata Farm has 461 hectares divided into 34 paddocks with a variety of eight-wire post and batten and electrical fencing. The contour of the property is rolling and medium graded hills.

The farm has a four-bedroom home which was extensively renovated in 2002. Farm buildings and stock facilities include a three stand woolshed, a two bay implement shed, plus various sheep and cattle yards.

Animals are watered by gravity-fed troughs in all paddocks – with water coming from three fenced off dams.

Tenders for Arata Farm and the Nitschke Road farm close on May 26.