Author: Editor

Global Dairy Trade Surges – Momentum is Building

Post author By Editor
Post date March 5, 2026

The latest GDT auction delivered another notable +5.7% increase, reinforcing the strong upward momentum in global dairy markets over recent months. The result confirms that demand for NZ milk remains robust, with buyers continuing to compete for product and secure supply.

Compared with the same period last year, the dairy market is now operating in a materially stronger pricing environment. Auctions are consistently clearing at near record levels, forward markets remain firm, and payout expectations are trending upward as the season progresses.

This improving outlook is now priced into milk price futures. Prices for upcoming seasons have risen sharply in a relatively short period, signalling that the market expects stronger returns to persist.

If current trends continue, the possibility of another significant and potentially record-breaking milk payout looks increasingly likely – great news for NZ Inc.

For dairy farm owners, the milk price remains the most notable driver of financial performance, followed by efficient cost management. When global auction platforms deliver consistent gains of this magnitude, investment on and off farm tends to occur, and the flow-on effect to other industries is material.

Stronger payouts not only enhance profitability but also improve farm financial resilience and capacity to enhance value. Historically, sustained improvements in commodity pricing have also translated into stronger rural farm values, although this adjustment often occurs with a slight lag. In our view, we are on the precipice of a re-rating of quality dairy farm values.

Against this backdrop, exposure to high-quality dairy assets becomes increasingly attractive for investors – the problem remains, accessing the sector without waking early to milk the cows.

Our solution: RDNZ has launched the Dairy Enhancement Fund, a diversified investment vehicle that enables all New Zealanders to access the benefits of dairy farm ownership. The fund aims to deliver reliable income from milk production while providing the potential for long-term capital growth through increasing dairy farm values.

The latest +5.7% GDT result is unlikely to be a one-off event, but rather part of a broader strengthening trend signalling growing confidence in the sector’s underlying fundamentals, underpinned by an insatiable demand for protein and grass-fed milk products.

For investors looking to capitalise on this environment, the macro conditions are aligning to support both near-term performance and long-term value creation. Investment starts at $50,000 NZD.

Momentum is building. The payout outlook is strengthening. If history repeats, the lag in land prices will shift quickly. To find out how you can invest in the sector, reach out to the team at RDNZ!

Forests News

New Government Limits on Farm-to-Forest Conversions: What It Means for Forestry and Carbon Investing in New Zealand

Post author By Editor
Post date December 6, 2024
Sticky post

This week’s announcement by the Minister for Agriculture and Forestry, Hon Todd McClay, brought a long-awaited development in New Zealand’s forest and carbon policy, which will have flow-on impacts for local and international investors.  The government’s announcement addresses agricultural land use conversions to forestry, by tightening the ability of investors to acquire farmland for planting into commercial forestry (‘afforestation’).  The key changes that were imposed by the government, effective 4 December 2024, were the introduction of:    

A moratorium on exotic forestry registrations for actively farmed Land Use Classification (LUC) 1-5 land;
An annual registration cap of 15,000 ha for exotic forestry registrations on LUC 6 farmland;
Allowing up to 25% of a LUC 1-6 land on an existing farm to be planted in forestry for the ETS, ensuring farmers retain flexibility and choice;
The ability for landowners to have their LUC categorisation reassessed at the property level;
Excluding specific categories for Māori-owned land from the restrictions, in line with Treaty obligations, while ensuring pathways for economic development; and
Transitional measures for landowners currently in the process of afforestation who can demonstrate an intent to afforest prior to 4 December 2024.

Importantly the changes do not affect investors that acquired bare land up to 4 December 2024 and had the intention of establishing forestry projects meaning investors with active transactions underway can feel comfortable that their agreements will be unaffected by the change providing the relevant conditions are met.   

In their announcement, the government left several areas yet to be confirmed including how the LUC 6 cap will be administered and applied for, the timing of seeking an allocation under the LUC 6 cap relative to the timing of sale contracting, and the timeframe over the moratorium for LUC 1-5 land.  RDNZ looks forward to the government’s clarification of these additional areas in the near futur

Where did this change come from?

RDNZ has been anticipating this policy shift for some time and has been in close communication with the government over the course of this year to be ready for the impact on our investor network.  The changes broadly align with the government’s election commitment to providing a better balance between land that is used for food production and land used for plantation forestry, where timber harvesting, carbon sequestration, and biodiversity outcomes are all key investment drivers.  

The change responds to significant pressure from the farming industry, which has been concerned about the recent level of farmland conversions for forestry. In recent years, conversions have increased with the government adopting a net zero target and emitters seeking the lowest-cost carbon abatement through carbon credits generated from forestry.

Some of the key facts

Over 2017-2022, conversions of farmland to plantation forestry are estimated to have averaged around 39,800 hectares per annum.  Contrary to the fears of many, around 87% of these conversions have been on LUC 6 and 7, some of the lowest productivity farmland around the country.  As context, New Zealand’s total area of active farmland was reported to be 13.6m hectares, with cumulative conversions over this period accounting for 1.8% of this area. It is important to note that New Zealand’s total forest area over the past 20 years to 2024 has actually declined, falling from 1.82m hectares to 1.79m hectares despite recent afforestation developments.

Estimates suggest that 57% of conversions over the 2017-2022 period were on LUC 6 farmland, meaning that, on average, around 22,700 hectares per annum have been acquired and converted. This is above the government’s intended cap of 15,000 hectares and, hence, will shrink the pool of land available for forestry.

Despite this, and with a growing carbon price, the government is determined to limit the trend that has taken place and, in doing so, place greater emphasis on net abatement where emitters have less forestry/offset credits available and need to focus more on lowering emissions from their production processes.

Silver lining for investors from carbon pricing and OIO improvements

This restriction is expected to place upward pressure on carbon offset pricing, resulting in a land value premium for existing ETS-registered forests.  Shrinking the long-term potential for afforestation in New Zealand will also tighten the pool of credits that can be generated to offset emissions under the ETS.  In a parallel development, yesterday’s announcement coincided with the final government ETS auction for 2024, where just over 4 million NZUs were sold at $64.00, erasing a potential 14.79 million units from future supply.  While the carbon secondary market remains flat at $64.00, the price floor for the first auction of 2025 is set to rise to $68.00, with significant potential for future price increases. The government is set to tighten auction volumes over the next five years, with only 6 million NZUs available across government auctions in 2025—a notable decrease from this year’s volumes. This ongoing supply reduction is expected to provide tailwinds to secondary market pricing as emitters look to secure the required carbon offsets for surrender dates in the coming years.   

On a positive note, RDNZ notes improvements in the OIO process brought about by improvements to processing timelines introduced by the new government earlier in the year. The changes have helped to support a view that the government welcomes foreign investment in New Zealand forest and farmland and is overall a positive step for the New Zealand economy at a challenging time in international markets.

The RDNZ consensus

While the changes announced by the government shrink the pool of land available for afforestation projects, RDNZ views the move as a net positive step for investors.  On the one hand, for existing investors, it constrains the supply of land slightly and will add tension to the NZU price and higher land values, helping to boost higher returns.  On the other hand, for new investors, it provides clarity and certainty over the future availability of land. It reinforces that the government continues to view forestry as a critical long-term solution to achieving lower emissions.

As a manager of farm and forestry assets, RDNZ is broadly supportive of this current announcement and, in New Zealand, continuing to retain its place as a world leader in agricultural and forestry products where mutual partnerships and diversity of land use are critical to growing investor returns and the country’s shared prosperity.

As always, if you have any questions or would like to discuss the current investment opportunity, please don’t hesitate to get in touch

– The RDNZ Team

News

Government’s Latest Emission Unit and Price Control Settings

Post author By Editor
Post date August 20, 2024

We are pleased to provide a timely Emissions Trading Scheme (ETS) update regarding the recent government announcement for emissions unit limits and price control settings for the period 2025 to 2029.

What’s New?

Following the Government’s consultation on the matter, they have opted to reduce the number of emissions units available through government auctions, a change RDNZ advocated for. This reduction aligns with the broader NZ ETS policy and is expected to drive more demand for secondary market NZ Units and positive development for the industry.

Despite National Party outlining its plan to get the emissions market into some form of stability, the latest auction result is just the latest sign, it may not be delivering. With secondary markets trading at over a 20% discount to the $64 Government floor pricing, it seems New Zealand’s largest emitters weren’t willing to sacrifice the discounted secondary market, despite a sustained period of low liquidity amongst market providers.

Why the Change?

The Minister of Climate Change is required to review and adjust emissions unit limits and price control settings annually. These updates ensure the NZ ETS remains effective in meeting New Zealand’s climate goals. A significant factor influencing this change is a perceived surplus of emissions units held by private ETS participants, which Government estimates could be 68 million NZ Units. The government is concerned that this surplus could lead to lower emission costs, potentially undermining reduction goals. Despite some industry pushback on this concern, the government has decided to act.

What’s Changed?

The National-led government has aligned with its commitment to a “strong and stable” NZ ETS by effectively halving the total number of base NZ Units available through government auctions, reducing the total from 41 million to 21 million units for the entire 2025-2029 period. Importantly, these NZ Units will not be added to reserve volumes, reinforcing the reduction in supply. We expect this pushes emitters to be more active in the secondary market, reducing the number of surplus NZ Units at a greater rate, with a likely price response

There had also been a proposal to concurrently lower the auction price corridor, including the floor price and cost containment reserve pricing. This had led to a disconnection between the secondary market prices and the government’s floor price. However, the recent announcement confirmed no changes to the price settings, which is a positive development for NZ Unit holders, helping to solidify a bounce in the price of a NZU.

Impact on Forestry

The announcement has already had a notable impact on spot prices, which surged near 10% to a price of $59 NZU today. This is a promising sign for the secondary market, providing a much-needed boost after several months of stagnation. As the supply of NZ Units decreases, we can expect prices to rise, potentially driving the secondary market towards this year’s floor price of $64 NZU. We expect the full weight of today’s decision will be felt over the coming years as a deficit of supply becomes more prevalent.

For forestry in the ETS, this impacts the potential cashflows we receive for the carbon sequestered by our forests. We are encouraged by the medium-term outlook based on these recent announcements.

News

Latest Updates From Roger Dickie

Post author By Editor
Post date August 8, 2024

It has been a busy few months for the team at Roger Dickie N.Z. with plenty happening in the last month.

Particularly, it was great to catch up with over 450 of our Partnership investors at the Annual General meetings. These meetings provide a fantastic opportunity for investors to contribute to the management of there investors and see first hand how there investment is operating. Because of the long term nature of Forestry investment many of our investors have been attending AGM’s for over 20 years, as well it is great to see the next generation of forest owners beginning to take part. For investors who were not able to attend the meetings we are working through finalising minutes and hope to have these out this week.

Awatea Forest Fund continues acquisitions

Despite a down turn in unit pricing in the latest quarterly revaluation, Awatea has continued to grow in scale, adding an additional property in the Hawkes Bay region to its portfolio.

Tainui, will add an additional 589ha of effective forestry area to the Fund, and is schedule to have over 250,000 seedlings in the ground this season. The property will also feature permanent areas, including natives and large scale Manuka plantings

Awatea continues to welcome new investors into the Fund, and it has been pleasing to see the continuation of additional investment from many existing investors, with now well over 170 investors into the Fund we remained focus on delivering sustainable returns for the long term.

Secondary Market spotlight

We currently have a great opportunity for anyone looking for additional forestry exposure, with units becoming available Turnbridge Forest Partnership via our secondary market.

Turnbridge Forest, is currently preparing to recommence the first rotation harvest and offers a shorter term hold for investors seeking distributions. The Forest is well located and expected to achieve strong volumes.

The partnership has a current Net Asset Value of $18.45, with units available for $15.68, a 15% discount.

If you would like to find out more please reach out to the team today. You can also find other secondary market options here

Global Dairy Trade Auction: Whole milk powder up 5.3% as overall GDT index surges 6.7%

Awatea Forest Fund Investment Opportunity Limited Units Available

Post author By Editor
Post date June 5, 2024

The Manager is pleased to present this limited opportunity to our current investors and registered interests in Awatea Forest Fund.

Investment Highlights:

Sale of Airstrip Forest at a significant premium to current valuation.
Purchase of additional Greenfield Forest Property adding scale and enhanced cashflows,
Expected development of unit value to be realised across the 2024/25 financial year,
Cash distributions to commence June quarter 2025.

Awatea has experienced strong capital uplift, averaging 11.8% annualised returns since inception, owed to an investment strategy that includes the purchase of only high-quality assets that add to the diversified nature and cashflow attributes of the fund.

In keeping with this focus on premium assets, Awatea has been offered a price materially above valuation to sell one of its forest properties. Presenting a time sensitive and significant value add opportunity for the fund.

To maximise this opportunity, the intention is to simultaneously acquire another greenfield property in time for planting this winter, increasing the funds scale, and lowering the average cost of investment, enhancing future returns.

The Value Enhancement

Sale of Airstrip Forest: The neighbour of our Airstrip Property (Pikowai, Bay of Plenty) has approached to purchase the forest and is offering a price more than $1 million (approx. 5-7 cents per unit) above current valuation and significantly more than cost. We are entertaining this sale (subject to conditions) and are in the process of drawing up a sales contract. While it is not a fundamental position of Awatea to trade forests, the price offered will realise a return materially more than current valuation and creates a further opportunity for the Fund. Completion of this sale would hinge on titles being issued for our subdivision of the farmhouses, as well, overseas investment approval of the purchase, both of which are considered formalities, albeit take time.

Purchase of Greenfield Property: To maximise this opportunity, the simultaneously acquisition of another premium greenfield property is intended. Targeting greater scale, enhanced cashflow from carbon and harvest opportunities, at a significantly lower cost per hectare than the sale of Airstrip Forest. This is approached in a time sensitive manner, placing importance on establishing the new property in forest this winter. We are advanced in our due diligence of three properties and currently negotiating the purchase of the preferred property. Given the significant spread of value to be achieved across the two transactions, we perceive there to be a further 5-7 cents per unit of possible capital uplift.

Limited Allocation of Units

As we intend to settle the purchase of the Greenfield Forest Property prior to completing the sale of the Airstrip Property, we are required to fund the mismatched dates of purchase and sale. While this could be achieved with bank financing, as Awatea is committed to grow to an overall holding of 5,000 hectares, it is the preference to grow through the further raise of investor capital. Hence, we are making a limited allocation of units available in June, ahead of the completion of transactions.

How to Invest

Investment is available to all investor types with a minimum investment of NZ $20,000. To register your non-binding interest, contact the team today and invest in New Zealand’s leading forestry and carbon fund.

Register Your Interest Now

Any applications for the intended offer must be applied for using the application forms accompanying the product disclosure statement (PDS). No indication of interest will involve an obligation or a commitment to acquire the financial products.

News

Forestry seen as modern investment

Post author By Editor
Post date May 23, 2024

New Zealanders are increasingly sharing in the potential of the country’s plantation forests as they begin to grasp the significant opportunities of sustainably-grown timber combined with carbon sold through the Emissions Trading Scheme.

Jeff Dickie, a director of Roger Dickie New Zealand Ltd, a leading forestry investment business which has advocated for forestry investment for 50 years, says their quest is to educate Kiwis of the benefits of forestry and carbon investment, an asset class that now rivals real estate and alternative forms of investment.

The perception of many Kiwis is that forestry is foreign-owned – true, he says, to the extent that New Zealand hosts large scale timber holdings for some of the more sophisticated global pension funds and institutions. According to the Ministry for Primary Industries, 70 per cent of plantation trees were in overseas ownership in 2013.

Foreign investors have a range of reasons to invest in New Zealand forests, chasing our unmatched forest growth rates, our developed timber infrastructure and proximity to the fastest growing economies, a fundamental driver of timber demand. On top of this, New Zealand is seen as one of the safest, politically-stable places to invest, Dickie says.

You can read the full article here.

News

Latest Government ETS auction fails to clear

Post author By Editor
Post date December 6, 2023

Just days after the newly formed Coalition Government announced that it would stop the current review of the ETS system, ‘to restore confidence and certainty to the carbon trading market’, the fourth and final ETS auction for 2023 has failed to clear, removing 15 million NZU’s (carbon credits), from circulation.

The final auction was widely regarded as a dead rubber, given the aggregation of units across all four failed auctions, and the auction rules that would eventually lead to this fourth failure. In total about 3.75 million units were bid for, the lowest bid to cover ratio yet. Because the clearing price was not met, the entire auction failed to clear.

The full results can be found here.

Making the fourth auction even harder to clear, was the new price controls that came into effect in December. This enforced a higher price floor, which was increased to $60, with a two-tiered cost containment price starting at $173. There were an additional 8 million units available above this price. The price floor moved to $64 for 2024 and latest projections put the price floor at $79 in 2028, paving an ascending price of carbon, all else being equal

National states the ETS market should be stable

This is the first ETS auction since the National party has taken office, and throughout the campaign they outlined the need for a stable carbon price, not only for forestry, but for emitters who purchase NZU’s to offset carbon emissions.

The National lead coalition has also earmarked ETS auction funds for tax cut policies, rather than previously being siloed for climate emergency response funds under the previous Labour government. So it would be safe to assume National party wont wind if the price of carbon moves higher.

One of the first National/ACT/NZF policy announcements was to stop the ETS Review, which had looked at a number of ways to promote gross emissions reductions, rather than only mass afforestation. This move had seen the price of carbon move from $70/NZU to $76/NZU in the days leading to the fourth auction, giving the market refreshed confidence for forestry moving forward in the ETS.

The National lead coalition has also earmarked ETS auction funds for tax cut policies, rather than previously being siloed for climate emergency response funds under the previous Labour government. So, it would be safe to assume the new Government has an even further incentive for carbon prices.

What’s that mean for Forestry Investors?

The reduction of supply of NZU’s following the removal of failed 2023 auctions, will undoubtedly drive a greater level of trade activity in the secondary market, retaining upward pressure for prices.

Although we would have expected to see greater bid volumes at yesterday’s auction, the lower demand is likely a by-product of participants knowing that the auction was likely to fail. Despite the removal of those 15 million Units, the NZU price has eased to settle around $70.50 following the auction as some profit taking took place.

Looking further out, carbon prices look set to ride a glossy pathway. There is now only one more auction in March, ahead of the May 31st date where emitters are required to surrender NZU’s for annual emissions. This sentiment is shared by many, with some market commentators pointing to a carbon price that exceeds $100/NZU in 2024, surpassing previous highs of $88/NZU.

How can you take part in a journey to higher carbon prices?

Many of the Roger Dickie group of investments have exposure to carbon credits and carbon prices, whether it be through the ownership of liability-free carbon, or through new greenfield forestry investments that sequester carbon to be made available for sale, all while growing high-quality wood products.

Forestry is widely regarded as the most cost-effective sequester of carbon, with our investments typically growing carbon credits at a cost materially less than $30/NZU.

The Awatea Forest Fund is Roger Dickie’s latest investment providing significant exposure to the benefit of forestry. Awatea is a diversified forest fund focused on risk-adjusted and regular returns through the sale of carbon and harvest of forests.

Speak to the team to find out more about the carbon market, and how our forests and our investments interact.

News

Awatea Forest Fund – Latest Quarterly Results

Post author By Editor
Post date October 18, 2023

The latest Awatea Quarterly report is out now with the Fund having completed its sixth trading quarter.

Awatea Forest Fund now holds six properties across four regions taking the total effective area to 1,687.4ha. For Investors, the positive returns have continued, delivering quarterly returns of +3.48% and taking the funds returns since inception to 20.43%.

You can find the full report below, which provides a detailed fund activity report and an update on Carbon and Timber markets.

Awatea is a forest and carbon investment fund, targeting the ownership of 5,000 hectares of premium diversified forest assets, generating cash and capital returns through the sale of stored carbon, harvest of trees, and natural biomass growth.

Awatea provides its investors the opportunity to own and take part in a large-scale and professionally managed forestry fund, generating real asset exposure to forestry and the long term outlook for wood products, as well, the New Zealand’s Emissions Trading Scheme for the recognition and monetisation of carbon stored is the funds forests.

News

Considering Forestry for your investment portfolio?

Post author By Editor
Post date October 10, 2023

Considering Forestry for your investment portfolio?

Building a diversified investment portfolio is key to achieving long term investment success while managing the risks associated with the investment assets. So where does a forestry investment like the Awatea Forest Fund sit?

Let’s review the benefits of a forestry investment:

A long-term investment with low volatility

Recent times have displayed first hand the impact of market volatility. Take equity and bond markets as an example, these assets tend to be impacted by a different set of market drivers, such as the impact of inflation and interest rates.

Forestry offers uncorrelated returns, with biological growth underpinning your investment, meaning your investment will still grow, even if the economy does not. Forestry is naturally a long-term investment, making it the perfect long-term store of wealth, ideal for intergenerational investing.

We are most interested in the outlook for timber consumption as a key driver of investment returns. With traditional drivers such as population growth and urbanization being met with advancement in wood technologies and a drive for renewable building products, World Bank forecasts a four-fold increase in global timber consumption between 2016 and 2050. Just look at the examples of multi-story developments converting to timber structures. Awatea strives to provide the best of it all, using a diversified mix of forest and carbon assets to generate cashflow returns while retaining those long-term benefits of forestry investment.

Financially benefit from a climate conscious investment

Since the introduction of the Emissions Trading Scheme (ETS), eligible forests can monetise carbon sequestered by our forests. Awatea targets productive forests with the benefit of carbon, providing dual revenues that blend for optimal investor distributions and capital enhancement.

Forestry is recognized by the NZ government for its part to play in achieving our net emissions targets, namely carbon neutral by 2050. To achieve this, more forestry is required, as well, a strong and stable carbon market.

The Awatea Forest Fund is ideally positioned, with a strong weighting of toward carbon eligible investments, with long-term forecasts presenting an average annual cashflow return of ca.13%* based on the funds existing assets. Awatea also offers a distribution reinvestment plan, allowing investors who aren’t focused on cash returns, to benefit from compounding reinvestment.

A real, sustainable and renewable investment

Similar to property funds, investing in forestry means you’re invested in real assets, with tangible ownership and connection to New Zealand’s primary industry, meaning even in a downturn your investments is protected by a physical and biological asset.

Forestry investors not only benefit from timber and carbon, but also the value of the land. Asset selection is key, with high quality and fit for purpose properties producing high quality logs in perpetuity.

Investors are increasingly aware of the impacts that heavy industrial companies are having on our planet, and this is changing the investment landscape. The environmental credentials of forestry are well established, acting as the earths lungs, absorbing and storing greenhouse gases while providing a sustainable way to build for our future.

We are serious about the environmental impact of our investments, through our forest investment and management activities we aim to promote greater biodiversity, cleaner waterways, soil conservation, wildlife habitats, as well, an underlying objective to create a positive climatic change.

Ready to add forestry to your portfolio?

Building a diversified investment portfolio is a key step to achieving financial sustainability. While we may be biased, forestry provides a great cornerstone investment that can be relied upon for generations to come. RDNZ. has been managing forestry investments for more than 50 years, managing more than $1 billion of assets for more than 3,000 investors.

News

Latest Carbon News

Post author By Editor
Post date September 1, 2023

The last week has seen plenty of news for Carbon markets, with the spot price rising to $70/NZU at the time of writing. An increase of some 70% since the June quarter.

We are pleased to provide a timely Emissions Trading Scheme (ETS) update regarding the recent government announcement for emissions unit limits and price control settings for the period 2025 to 2029.

The Manager is pleased to present this limited opportunity to our current investors and registered interests in Awatea Forest Fund.

Register Your Interest Now

Considering Forestry for your investment portfolio?

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