Friday, July 8, 2022

Dairy farm sales aided by mild spring.

Dairy farm values have increased in recent months and the number changing hands is also well up from the same time a year ago.  A mild winter means farms are typically in better condition than they normally are at this time of the season and a strong milk price forecast for the current season has assisted sales volumes.  “Ideal late winter and early spring conditions, combined with solid payout predictions for primary produce have raised levels of confidence in the rural sector”, says Real Estate Institute of NZ (REINZ) Rural Spokesperson Brian Peacocke. Demand for dairy farms has been strong right across New Zealand reports REINZ. “Demand for quality farms is strong across the entire country and in most regions, early signs indicate a shortage of supply for the spring selling season.” Brian Peacocke REINZ Rural Spokesperson The REINZ Dairy Farm Price Index rose by 2.2% in the three months to July compared to the three months to June, from 1,738.9 to 1,777.1. Compared to July 2012 the REINZ Dairy Farm Price Index rose by 12.2%. The REINZ Dairy Farm Price Index adjusts for differences in farm size and location compared to the median price per hectare, which does not adjust for these factors. For the three months ended July 2013 the median sales price per hectare for dairy farms was $34,882 (47 properties), compared to $29,555, for the three months ended June (66 properties), and $22,679 (29 properties) for the three months ended July 2012. The median dairy farm size for the three months ended July 2013 was 147 hectares. Included in sales for the month of June were 10 dairy farms at a median sale value of $35,713 per hectare. The median farm size was 149 hectares with a range of 64 hectares in Waikato to 525 hectares in Hawkes Bay. The median production per hectare across all dairy farms sold in July 2013 was 861kgs of milk solids.  Data released by the

Nine regions recorded increases in sales volume for the three months ended July 2013 compared to the three months ended July 2012. Waikato recorded the largest increase in sales (+25 sales), followed by Auckland (+23 sales) and Bay of Plenty (+13 sales). Four regions recorded decreases in sales volume with Wellington recording the largest fall (-7 sales), followed by Manawatu/Wanganui and West Coast (-2 sales) and Gisborne (-1 sale). Compared to the three months ended June 2013 six regions recorded an increase in sales, lead by Bay of Plenty (+10 sales). 

“Calving activity reduced sales of dairy farms in July, but sales of finishing and grazing properties have remained at healthy levels in the top half of the North Island as well as in Canterbury, Otago and Southland regions. Sales for other farm types have remained light.”

“Activity has remained strong in Southland for all farm types, with particular demand for properties with soils that are capable of sustainable wintering. There is strong interest in grazing properties, particularly dairy and dairy support properties in Otago. The proposed irrigation schemes in Canterbury and Hawkes Bay are also generating interest in those regions.”

Grazing properties accounted for the largest number of sales with 44.1% share of all sales over the three months to July, Dairy properties accounted for 10.7%, Finishing properties accounted for 24.9% and Horticulture properties accounted for 8.9% of all sales. These four property types accounted for 88.6% of all sales during the three months ended July 2013.


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