Billions of US investment into Aussie ag sparks debate

The Worral Creek Aggregation, which produces cotton, crops and cattle, was sold to Alkira Farms, a subsidiary of US-based agricultural investor Farmland Reserve.The Weekly Times | 18 August 2025

by Conor Fowler

Labor has pushed back the release of documents outlining risks posed by climate change. The analysis conducted by the Department of Climate Change details the severe economic, environmental and budgetary risks. It includes estimates of heat-related deaths, land mapping of coastal inundation from rising sea levels and devastating potential impacts on the agricultural sector. The modelling has been mostly complete since late last year, while stakeholders have been notified of its impending publication.

A flurry of recent market activity from US investors into Australian farmland has some in the industry questioning if the current foreign investment regulations around American investment are stringent enough.

The US ranked fifth among foreign investors of Australian agricultural land as of June 2023 – behind China, the United Kingdom, Canada and the Netherlands – with 2.208 million hectares, according to the most recently available federal government data.

This was lower than the levels held in 2022 (2.256 million hectares) and 2021 (2.926 million hectares) – but recent purchases have put the spotlight on US companies and their Aussie farmland portfolios.

New York-based teacher superannuation company Nuveen Natural Capital holds about $2.2bn worth of prime cropping country in Australia.

MRA Merrowie – backed by the Municipal Employees’ Retirement System of Michigan – purchased the 32,730ha Merrowie Station from Twynam Agriculture Group in 2019 and the 1747ha Sunland Aggregation in 2021 for more than $45m.

More recently, Farmland Reserve – backed by the Church of Jesus Christ of Latter-day Saints in the US – paid $340m for the Worral Creek Aggregation at Talwood in southern Queensland last year, while also spending almost $140m for more than 14,000ha across three properties in New South Wales.

Currently, US-owned enterprises can purchase Australia farmland valued up to $1.46bn without needing approval from the Foreign Investment Review Board. The threshold has been in place since Australia and the US signed a free-trade agreement in 2004.

But the recent level of buying activity led Grain Producers Australia last week to call for an inquiry into whether the rules needed to be overhauled.

“If the FIRB national interest test isn’t fit-for-purpose, and risks our sovereignty, while putting our farmers at a competitive disadvantage, then it needs to be urgently updated and modernised, before it’s too late,” GPA chief executive Colin Bettles said.

Mark Barber, head of agribusiness investment services for Elders Rural Services, said the maturity of the Australian market, the ability to deploy large amounts of capital in single transactions and the sophistication of the corporate ag sector in Australia had US investors as active as they’ve ever been.

Mr Barber said that as a principle, capital should not be restricted, but encouraged to flow as freely as possible.

“You look at the value that some of this foreign capital brings into the country, the way that it develops industries over the many decades,” he said.

“It creates liquidity in the country, and we’re seeing the size of our transactions creep up as land values increase and the sector consolidates. “(The threshold) $1.46bn, it’s a pretty arbitrary number, what does it actually mean?”

With Macquarie Asset Management looking to sell Paraway Pastoral Company, and offers to be potentially north of $2bn, Mr Barber said Australia should be wanting “to maximise the competition for that as much as we can”.

And as for the FIRB in general, Mr Barber said he did not “think it’s served much value at all”.

“I know it’s a bit controversial, but it’s expensive, and takes a lot of time,” he said.