Reporter Shawn McAvinue attends a clearing sale of the remaining ewes on Wisp Hill Station in South Otago to clear the way for its international owners to plant forestry and talks to former owner Leonard Ward about his reasons for selling and how he considers himself lucky to get out when he did.
A clearing sale of the last of the capital livestock on Wisp Hill Station in the Owaka Valley was billed as "the last hurrah" by the auctioneer.
Swedish furniture giant Ikea’s parent company, Ingka Investments, was given approval by the Overseas Investment Office to buy the 5500ha sheep and beef farm in 2021 to develop exotic production forestry.
The deal allowed the station owners, Southland brothers Leonard and Graham Ward, to phase out their operations in a three-year period.
Bidding on the 2900 in-lamb Romney ewes at the clearing sale was buoyant and everything sold.
Carrfields agent Roger Stratford said two-tooth one-shear ewes sold for $170, two-shear $168, three-shear $155 and four-shear $122.
Leonard Ward said the prices fetched for the ewes were higher than expected, considering the number of ewes for sale in the South Island and feed supply being short.
"All in all, we did pretty good."
The brothers bought Wisp Hill in 1993 and got a manager to run it.
"We did a lot of hard yards up there, a lot of fencing and development work, a lot of young grass. We were just getting the place cranked up."
About 25,000 stock units were being run when they sold it.
The sale of Wisp Hill Station was part of an "exit strategy" to get his two sons, who were working as builders, into farming.
"It was a no-brainer for me."
He declined to reveal the sale price.
"It was a lot of money. It was a good sale".
He believed if he sold the farm now, it would fetch a third less than the price Ingka Investments paid.
"Unfortunately, it had to go to trees but they were paying the money at the time and we were fortunate to get out when we did."
If he had not sold for forestry, the next owner might have and made the capital gain instead of him.
"That was always my argument. It just so happened they came up with the money and it just so happened they were tree farmers — that’s the guts of it."
If they had held on to the farm and put it on the market today, he doubted they would get as much due to the government having tightened rules for overseas investors buying farms for forestry and sheep commodity prices being down.
He disagreed with a sentiment forestry provided fewer jobs than sheep and beef farming.
"Forestry provides a lot of work. There is a lot of spraying, pruning and thinning. There’s more work than what people think; probably a lot more than what we created to be honest. You’ve got loggers, sawmillers, truck drivers, guys overseeing the forest — a huge amount of inputs go in."
One of his sons was now working on the family sheep and beef farm in Morton Mains, near Invercargill.
The plan was to buy another farm nearby for the other son to run "to keep the boys in a close proximity, to help each other out".
The new farm would not necessarily be used to run sheep and beef.
"Perhaps we will go down the vegetable track, or flowers — there’s options".
When asked if it was time for New Zealanders to stop being sentimental about sheep and beef farming and plant more forestry, he disagreed.
"I’m a hardened sheep and beef farmer. I’d hate to see too many more trees being planted in New Zealand".
The Ministry for Primary Industries’ "Afforestation and Deforestation Intentions Survey 2023" shows nationally 88,000ha of farmland was converted to forestry in 2022 and 68,500ha in 2023.
Forecast plantings for this year were 51,800ha, of which 90% was expected to be pine.
However, the report shows the hectares of farmland converted to exotic forestry in Otago increased more than 1200% between 2019 and 2023.
The increase in Southland between 2019 and 2023 was 460%.
Otago accounted for 14% of the exotic afforestation in New Zealand in 2023 and Southland was 9%.
New Zealand Farm Forestry Association national president Neil Cullen, who lives in Waihola after retiring from his family sheep and beef farm in the Catlins, said he expected the hectares of farmland converted to exotic forestry in the South to drop next year.
The government having tightened restrictions on international companies buying farmland had "cooled interest" from overseas investors.
He knew of people who had signed an agreement to sell their sheep and beef farms to overseas companies, pending approval from the Overseas Investment Office.
"Those sales fell through because of the OIO restrictions and the farms are still on the market."
Other factors reducing new forestry being planted included the log price falling and a forecast of demand from China softening.
Sheep and beef farmers could spread the risk of their business and income opportunities by planting some of their farm in forestry and entering it in the emissions trading scheme.
Forestry could generate up to three times more income than sheep and beef farming per hectare.
"Sheep and beef farming has no God-given right to be the land use."
He did not want restrictions loosened to allow more international investment to buy farms for forestry to boost potential sale prices.
"I’d prefer to see New Zealand land owned by New Zealanders."
When Wisp Hill Station sold in 2021, South Otago sheep and beef farmer Stephen Jack voiced his concerns about the land-use change threatening the fabric of rural New Zealand and warned it would be the death of sheep and beef farming in New Zealand.
Federated Farmers Otago meat and wool vice chairman Mr Jack said poor lamb, mutton and wool prices had some sheep farmers questioning the viability of their businesses, as on-farm costs including compliance, remained high.
"It is a terrible time on farm at the moment and I think most sheep and beef farmers in Otago are seriously considering what they are doing and confidence is at an all-time low ... How long can you take $100 lambs, $60 ewes and bugger all for your wool?"
In hindsight, the decision to sell Wisp Hill Station was a "prudent one, made at an opportune time".
However, forestry being planted on farmland was raising issues around economies of scale for those sticking to farming livestock.
"We are grappling with how we can justify to charge a water rate for forestry land."
His concerns about productive farmland becoming forestry remained.
"Do we want to be a nation of pine forests?"
