Dairy Farm prices defy product slump

The median price for dairy land has risen 32.4 per cent in a year.

Dairy land sells strongly despite product woes

The slump in dairy prices has not translated into weaker dairy farm prices, Real Estate Institute of NZ figures show.

Between August and October the median sales price per hectare for dairy farms was $43,299, compared to $40,462 for the three months to September, and $32,701 for August to October last year, REINZ said.

The institute's dairy farm price index rose 7.3 per cent in the three months to October compared to the three months to September, from 2218.8 to 2381.0.

The index, which adjusts for differences in farm size and location, rose 34.4 per cent in the year to last month.

The rise in dairy farm prices is despite continuing declines in dairy product prices. At this week's GlobalDairyTrade auction, prices were down 3.1 per cent on the last auction. Product prices have fallen by more than 50 per cent since last November.

REINZ said farm prices in general were up in the three months to October.

All up, 1920 farms were sold in the year to last month, 17.9 per cent more than in the year to October last year.

The median price per hectare for all farms sold between August and last month was $27,898, up 13.5 per cent on $24,590 recorded for the same three months a year earlier.

Six regions had increases in sales for the three months to October period, compared with the same time last year.

Northland had the largest increase in sales.

REINZ rural spokesman Brian Peacocke said the figures reflected "an awakening market, with a strong build-up moving into spring".

A large number of properties throughout the North Island have been marketed during October.

By region, Peacocke said it was a mixed market in Northland, with some concerns regarding the likely dairy payout for next season.

Dairy farms in the Waikato were attracting intense interest, and record prices had been paid for select properties linked to the successful Tatua Co-operative Dairy Co.

Quality dairy support properties and cropping blocks were in strong demand and high prices were being paid, he said.

Prices were holding strongly for sheep, beef and dairy support properties in the mid to lower south of the South Island.

Grazing properties accounted for the largest number of sales with 48 per cent share of all sales over the three months to October.

Horticulture properties accounted for 17.1 per cent, finishing properties 13 per cent and arable properties 8.4 per cent.

The four property types accounted for 86.4 per cent of all sales during the three months to October.

Going up
• 1920 farms sold in the year to October, up 17.9% on a year ago
• $27,898 median price per hectare in the three months to October, up 13.5% on a year ago.
• $43,299 median sales price per hectare for dairy farms in three months, up 32.4% on a year ago.
• 48% of sales between August and October were grazing properties.