Sunday, July 3, 2022

Strong demand for New Zealand dairy farms

Demand for dairy farms pushed up the number of farm sales in the three months to May 2013.  

In the three months to and including May 2013, 90 dairy properties changed hands, a 50% increase on the same time period in 2012.  Good quality properties sold very well during this period.

“Sales in the dairy sector for the season concluded on a solid note with continued strong demand for good properties. The number of dairy sales for the year ending May 2013 was strongly ahead of the previous year and reflects an increasing degree of confidence within the dairy industry,” says REINZ Rural Market Spokesman Brian Peacocke.

The strong demand for quality dairy farms also pushed up selling prices. In the three months ended May 2013 the median sales price per hectare for dairy farms was $34,850, compared to $29,485 per hectare for the three months ended May 2012.  

Included in sales for the month of May were 19 dairy farms at a median sale value of $34,932 per hectare. The median farm size was 94 hectares with a range of 44 hectares in the Waikato to 442 hectares in Southland. The median production per hectare across all dairy farms sold in May 2013 was 995kgs of milk solids.  The median dairy farm size was 124 hectares.  

While these farm sales figures appear very positive the REINZ Dairy Farm Price Index tells a very different story.  For the three months to May 2013 the Index stands at 1761.8 points.  This was an increase of 0.4% compared to the three months to April 2013, but was 4.6% below the level recorded a year ago. 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

The REINZ Farm Price Indices have been developed in conjunction with the Reserve Bank of New Zealand. It adjusts sale prices for property specific factors such as location, size and farm type which can affect the median $/hectare calculations and provides a more accurate measure of farm price movements. The REINZ Farm Price Indices has been calculated with a base of 1,000 for the three months ended March 1996. The REINZ Farm Price Indices is best utilised in assessing percentage changes over various time periods rather than trying to apply changes in the REINZ Farm Price Index to specific property transactions.

 

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