Doubling down on dairy While turbulence in the dairy market has led some farmers to look elsewhere, others are confident about the industry’s future and are doubling down on their investment. For Steve Mathis, being born into the dairy industry has given him a long-term view – and for him, that view is rosy. Steve grew up on the family dairy farm in Tirau and then headed to the Dairy Board as a management cadet when he left school. Like many before and since, he went farming then 50/50 sharemilking then bought his own farm. Now he’s got two dairy farms under managers, takes possession of a third on 1 June and has a new career selling real estate for Property Brokers’ rural team. Yes, specialising in dairy. Steve’s confidence is shared by industry analysts, market commentators and sector heavyweights such as Fonterra.
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There has been a lot of ‘taking stock’ in the dairy industry over the last decade. For some, that has led to a decision to take the leap into something new; for others though, casting an eye over their operation has led them to see potential and to double down on their dairy investment.
in the dairy industry than the strength in the dairy real estate market.
You can see it around the country. Dairy farmers are rising to the challenge of higher environmental and sustainability expectations. Farmers committed to improving animal welfare are spending big money on cow barns for wintering and also to protect fragile soil structures when the spring rains come.
“Our view for autumn and spring 2022 is to see a continued strengthening of the dairy real estate market,” Conrad says in his Rural Market Update for May (page 60). “We still hold the view that investing in dairy assets offers very strong value upside even at current levels.”
Steve’s boss at Property Brokers, Conrad Wilkshire, sees it in the sales data. For him, there’s no greater sign of confidence
An industry standard measure, the national dairy rolling 12-month median price, was $40,300/ha at February 2022. This is the strongest result in a decade. Value of total sales is heading towards $1.5 billion, not far shy of an all-time high.
He sees yet another solid dairy season to come “even while absorbing some of the most significant international market shocks of the 21st century”.
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