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Autumn 2018 Property Pull-Out March 5, 2018
farmersweekly.co.nz
Dairy land prices edging up Alan Williams a.dubu@xtra.co.nz
O
VERALL dairy farm prices edged higher in the three months to the end of January but remain well below the level of a year earlier. The Dairy Farm Price Index was 8.9% lower year-on year, according to Real Estate Institute figures. That contrasts with a 5.8% increase in the All Farm Price Index over the same period. The rural real estate market is constrained and the dairy farm market particularly so, the institute’s rural spokesman Brian Peacocke said. That was despite widespread rain easing feed supply concerns, except for the Otago and Southland regions. The median price per hectare for all farm sales over the three months was $28,257, up from $27,058 at the same time a year earlier but down 3.4% from $29,266 in the three months to December. Grazing and finishing farms make up most sales and were 54%
of sales over the three months to the end of January. These classes of property do not have a separate Index measure of price but median prices were higher by 6.5% and 7.3% respectively over the full year to January. The Index price measures make adjustment for differences in farm size, location and farming type whereas the median price does not. The index is seen as the best indicator of prices. In a mixed picture the Dairy Farm Index rose by 1.3% in January from December though it was well down year-on-year and the median price fell throughout. The median price for all farms was lower month-on-month but higher year-on-year along with the All Farm Index. The median price for dairy farms in the three months was $37,235/ha, down from $40,484/ ha for the December period and from $44,322/ha for January last year. That is a 16% year-on-year fall. Among the major dairying areas, the institute reported that good properties continue to sell well with no demand for lower quality farms.
Dairy farm prices were down by 10%-plus. Farmers’ confidence was improving with good rain and a steady milk payout. Listings were lower and buyers were constrained and careful. In Taranaki, January was busy
Among the major dairying areas, the institute reported that good properties continue to sell well. with good sales of dairy units, often as a result of pre-Christmas auction and tender programmes that did not sell at that time. There were very few top farms available and prices for second and third tier properties were down by 10% to 15%. A shortage of listings was reported. In Canterbury, buyers were being very selective, with reports of bank advice impacting on prices. Further south, dairy farms were
selling in Southland, however, Mycoplasma bovis was creating major concerns over movement of dairy cows and replacement heifers, Peacocke said. This issue had the potential to impact negatively on the rural sector around the country. As has been noted earlier, marginal dairy farms in Northland are being looked at for a return to beef farming. In the overall Canterbury market, there was reasonable activity on finishing units but activity was generally constrained with a medium level of listings and reduced number of buyers. Climatic conditions had suppressed activity in the arable and vegetable-growing sectors. In Southland the outlay for capital stock and the need for higher equity was keeping the sheep and beef property market sluggish. The Hawke’s Bay, Manawatu and Wairarapa regions had good sales levels with finishing and grazing properties but little dairy farm activity. Eleven of the 14 regions reported a reduced number of sales in the three months to the end of January than for the same period a year earlier.
Otago (26 fewer) and Northland (25) had the biggest declines. The very dry conditions had had a considerable impact in Otago, Peacocke said. Gisborne, Nelson and Southland recorded small increases in the number of sales. Peacocke said sales figures for the January period were reasonably consistent with the latest December period but significantly lower than a year earlier. The grazing category had 32% fewer sales year-on-year but still had the most sales by number of any farm category and arable farm sales were down 40%, whereas numbers were steadier for dairy, finishing and horticulture blocks. The median price for finishing farms for the January period was $30,328/ha, compared to $32,000 in December and $28,268 in January 2017. Grazing farms had a median price of $11,828/ha in January, just down from $11,937/ha in December but up on the $11,102/ ha in January 2017. Horticulture block prices were down on December levels but consistent with January 2017 prices.