Northland, Waikato & Bay of Plenty

Market update

While weather this season has been less than spectacular for everybody, underlying market growth expectations for kiwifruit look solid. Interest rates are having an impact on the sector, too, and it seems to be a case of time and place in terms of where we are in the cycle.

On the flip side, those B and C class properties, particularly those with contour or compliance issues, have attracted little interest and vendors are having to adjust their expectations if they are motivated to sell.

There has been a shift from agri bankers and their willingness to support farmers to grow or change their business, but in general there is an underlying lack of confidence in the agricultural industry currently, and people are adopting a wait and see approach.

However, the fundamental drivers for the sector look to be as solid as they have for a long time. There is less food available globally and I would like to think commodity prices will lift further.

The horticulture sector is facing its own battles and kiwifruit is the big name in the Bay of Plenty, typically Gold variety. The 2022 season was a difficult one for growers in terms of fruit quality and being able to get fruit off the vines. For Green growers, costs have gone ahead of the payout.

There are headwinds in the industry, but it is worth noting that when land values surpassed $2 million/ha, prices were driven by a development phase. Values have come off the dizzy highs and are sitting at levels more related to profit now.

Realistically, the market has come back 2530% from the peak about 12 months ago. We are seeing a rise in vendors checking the pulse of the market. There is a lot of activity, and we anticipate an increase in the number of orchards available this season.

The Property Brokers team completed over $50 million of sales in Bay of Plenty kiwifruit orchards in the last season and the outcomes have been great. The industry may be battling a storm at the moment, but it has a bright future.

In Northland, we are still seeing a number of farms exiting the dairy scene and quite a bit of activity with forestry and carbon. With its port, the North may have longer to run on that front than other regions. There is high attrition from dairy supply either going to beef or forestry.

The port is a key driver for the North, and forests within 100km of the port represent money in the bank for forestry.

Without a doubt, the Property Brokers Rural Outlook magazine provides significant reach in terms of finding the best buyer, and represents great value.

Our relationship with Farmlands also provides a significant intellectual approach to solution providing, and you can be assured of a great outcome.

Ian Morgan Rural Manager & Sales Consultant Bay of Plenty & Northland