Another farm in Central Hawke's Bay is set to be converted to forestry. Photo / NZME
An overseas buyer who recently bought a large farm in Hawke’s Bay has snapped up the neighbour’s farm and plans to convert both into a new forest.
The latest purchase is the fourth farm to be sold for forestry conversion to an overseas buyer in about five months in Central Hawke’s Bay.
The Overseas Investment Office (OIO) has granted consent for all four purchases, citing benefits to New Zealand that include capital investment and increased exports.
The latest purchase is a steep 344ha cattle breeding and finishing farm on Nilsson Rd, Kairakau.
Kauri Forestry Limited Partnership has bought the farm, and also purchased the neighbouring 1500ha Waipuna Station in Elsthorpe earlier this year.
Kauri Forestry LP is owned by a family company based in Switzerland and Germany.
It plans to convert both farms into a forest, with planting expected during 2026 and 2027, mainly in radiata pine.
“Once matured, the crop of trees will be harvested and replanted,” the OIO decision stated.
Kauri Forestry LP also owns the 800ha Te Manuiri Station further south in Omakere, which it also bought earlier this year.
The farms it has bought feature mainly steep country classified as land use capability 7 or 6 (for comparison, the worst and steepest land is LUC 8).
Che Charteris, chief executive of Craigmore Sustainables, which represents Kauri Forestry LP, said it was careful to buy land for forestry that was not good for farming.
“Not all land use class 7 is good for forestry [either], some of it is too erodible, so it’s actually a really narrow class,” he said, in terms of buying the right blocks.
“It has to be too steep for farming, but not too steep for forestry.”
The latest purchase struck that balance, and “rounds that Waipuna block out quite nicely” in terms of connecting with the neighbouring property.
“We don’t want to pick the eyes out of the community, and we don’t want to create an environmental issue either by planting trees in the wrong place.”
Charteris said a new law expected to pass soon (the Forestry Conversion Amendment Bill), coupled with the rise in sheep and beef prices, should “scare off those ratbags that are chasing that rolling [farm] country for trees”.
“We will continue to look for land that is too marginal for farming - either stations that are rundown or too steep, and that is going to be land use class 7.”
The 344ha farm on Nilsson Rd was bought from the Marriott FT trust. It has been approached for comment.
The farm sold for $3.76 million, according to realestate.co.nz.
Meanwhile, a 480ha farm in Waipukurau was sold earlier this year to a buyer from Singapore for forestry conversion.
Federated Farmers Hawke’s Bay president Jim Galloway said another farm conversion in the region was disappointing.
“It’s not just a farm gone. We are all interconnected.
“You might say it is on class 7 hills, but ... that steeper country is our breeding country. So that supplies our finishing [farms].”
For example, thousands of lambs were bought from steep hill country and then finished (or grown) on flatter land around Hawke’s Bay, before going to the freezing works, he said.
He said forestry conversions had other flow-on impacts, such as less work for companies and industries that relied on farms, and reducing rolls at rural schools that supported farming families.
On a positive note, Galloway said sheep and beef prices were strong, which could help protect farms against conversions.
The Forestry Conversion Amendment Bill (expected to be passed into law soon) was aimed more at protecting LUC 1-5 farmland from conversion, rather than steeper country, he said.
The LUC system classifies land based on how productive it is, and takes into account features such as climate, soil, slope, vegetation and erodibility.
LUC 1 is the most productive land and LUC 8 is the least productive.
The Herald revealed last month that overseas forestry companies have spent nearly $1 billion buying more than 100,000 hectares of New Zealand farmland over the past decade.
Gary Hamilton-Irvine is a Hawke’s Bay-based reporter who covers a range of news topics, including business, councils, breaking news and cyclone recovery. He formerly worked at News Corp Australia.