The company says there was strong investor demand for the Birch Hill Partnership project, which reflects a quiet revolution taking place across the country.
It says manuka forest plantings for honey production are surging across New Zealand following breakthroughs in manuka breeding and management, along with strict new rules around manuka honey standards.
The growth reflects growing confidence that manuka honey production presents a lucrative alternative for marginal hill country land that was until recently only suitable for sheep and beef farming.
Over the next two years the new partnership plans to plant two steep central North Island properties in manuka trees, developing the land with leading manuka honey producer Comvita.
In a video discussing the opportunity, the Feilding-based rural land investment provider’s chief executive Andrew Watters says the first property bought was at Birch Hill, near Pongaroa, which covers 545ha on the central North Island’s east coast.
He says the second half of the investment will occur hopefully in the next 12 months, but no more than 24 months’ time.
“Bees are somewhat subject to the weather they’re experiencing, so if we have a property on the east coast and a property on the west coast, we get a nice balance – a bit of a diversification of our risks,” Watters said.
Birch Hill is MyFarm’s second large scale manuka forest investment.
Head of sales Grant Payton says the first was Waimarie Manuka at Mangamahu, between Whanganui and Taihape, which they took over in March 2019.
Initially, 700-800ha were planted in manuka before a subsequent planting brought the total area of manuka plantation on the property to about 1100ha.
Manuka plantations have two income streams, a share of the honey revenue and also carbon credits.
Carbon is sequestered into the plantation and the credits can be sold to the Emissions Trading Scheme (ETS).
Payton says after three years manuka plants exhibit higher levels of the chemical compound DHA, which is the compound that leads straight through to UMF (unique manuka factor).
“After about year three onwards, we’re starting to expect some increased productivity from A, the flower, and B, the honey,” Payton said.
“And from year five onwards, we are starting to expect to get towards maximum honey production.”
Birch Hill has forecast annual cash returns starting at 3.3%, rising to more than 10% once the trees are fully established.
MyFarm estimates manuka plantations can yield between $1800 to $2200/ha for land that has historically delivered $800 to $1200/ha of income during the past 10 years.
Costs on a manuka plantation are low once established with track maintenance, some pest control and apiary costs.
Watters says that works out at about 20% of the property’s income, which compares favourably to typical sheep and beef operations where typically costs are 40-60% of gross farm income.
“That means the investment is really robust and resilient to changes in climate affecting production and changes in the market,” Watters said.
The forests also reduce sediment, nutrient and debris flow into the country’s water ways, and increase native biodiversity.
MyFarm expects manuka plantations will form a growing share of its syndications portfolio as landowners and investors gain confidence in the economics of planting a shrub that many of their ancestors worked incessantly to eradicate from their land.
The company is aware of other honey exporters becoming active in the manuka afforestation space, with possible interest in the tens of thousands of hectares.
Manuka plantation honey has lower concentrations of other species as in the wild locations can be ‘contaminated’ by nectar sourced from pastures, such as clover and bush, which includes other native species.
Bees will chase flowers that produce more nectar with a higher sugar concentration, such as clover, particularly if it’s more accessible.
If it’s abundant enough, those flowers will distract the bees from foraging for manuka, which deliver nectar in tiny drops.
General manager of investments Con Williams says with improving knowledge around genetics and the importance of location the manuka industry will likely move away from wild capture towards a more farmed state, just as has been seen in other sectors.
That could mean future opportunities for hill country landowners who have parts of their properties that are not productive for pastoral farming.
Williams says the ideal type of blocks are cone or bulb shaped, with the bees down below where they can access water. They can then fly up to harvest the nectar from forests planted higher up, before flying down back home to the hives.
Northland has a good track record of producing honey with the highest UMF concentrations.
However, due to the region’s climate, manuka there flowers very early in the season at a time when the weather can be unsettled, so annual honey yields can vary.
He says areas such as the central and lower North Island, where plantations flower later in the year, benefit from more stable weather during early and mid-summer, so tend to have more reliable harvests.
