Dairy farm sales in Northland edge up

Northland dairy farm sale prices have crept up to $13,703/ha, far below the national dairy farm sales medium of $34,328/ha. But Northland finishing farms, fetching $27,201/ha, are close to the national median sales price of $30,656/ha.

There were 10 Northland dairy farm sales in the three months ended February 2018, with the median sales price per hectare rising to $13,703 from $13,292 for the eight dairy farms the Real Estate Institute of NZ (REINZ) recorded sold in the region in the three months ended January.

The number of Northland finishing farm sales also increased from five to nine over the same period, but the median sale price per hectare fell from $31,096 in January to $27,201 last month.

The median sales price per hectare also fell for Northland grazing farms, from $13,304 for the 13 properties sold in the three months ended January to $10,290 for the 10 sold last month, which was lower than the region's grazing farm median of $11,101/ha in February 2017 and $10,794/ha median in February 2016.

Of note is the 9.9 per cent reduction in the Dairy Farm Price Index over the past 12 months, a likely consequence of the relatively cautious tone in the marketplace where vigorous due diligence is the norm.

Other Northland rural land sales last month were a forestry block which made $4676/ha and an arable property which fetched $15,423/ha.

However, the total median price for the 31 Northland rural properties sold in the three months ended February was $15,423/ha, up from $13,748/ha for January sales but still slightly below the $15,626/ha median for February last year.

There were 384 farm sales nationally in the three months ended February 2018, down from 436 sold for the three months ended February 2017. The median price per hectare for all farms sold in the three months to February 2018 was $27,523 compared with $27,395 a year earlier.

The median price for the 89 dairy farms sold nationally in the three months to February 2018 was $34,238/ha. On a price per kilogram of milksolids basis, the median price was $37.45kgMS, compared with $36.91kgMS for the three months ended January and $35.45kgMS for the three months ended February 2017.

The median sales price for the 113 finishing farms sold nationally in the three months to February 2018 was $30,656/ha and for the 101 grazing farms sold nationally in that period it was $10,827/ha.

REINZ rural spokesman Brian Peacocke said: "Sales data for the three-month period ending February 2018 indicates an easing in volumes over the last 12 months for all categories apart from finishing, which showed a small gain.

"Of note, however, is the 9.9 per cent reduction in the Dairy Farm Price Index over the past 12 months, a likely consequence of the relatively cautious tone in the marketplace where vigorous due diligence is the norm. Such due diligence is being tested by the spread of mycoplasma bovis, a notifiable disease currently impacting the dairy industry, predominantly in the South Island at this stage.

"Partly as a result of this disease, there is a noticeable increase in dairy farmers seeking to buy dairy support properties, the logic being the ability to contain replacement heifers in a controlled environment rather than exposing such cattle to the risk of cross-infection which can occur on specialist grazing farms which cater for multiple-sourced grazing animals.

"The offset to the above is the favourable growing conditions experienced by many regions throughout the country, enabling producers to recover production lost earlier in the season, or to take advantage of the strong prices being paid currently for lamb and beef."

REINZ said: "Northland was quieter on the dairy market but had good sales activity on finishing and grazing properties; sufficient rain to be having a negative impact on farms with clay soils; stimulated by new incentive payments, emerging inquiry for lower quality sheep and beef farms to change to forestry; an increasing focus on quality land suitable for kiwifruit and/or avocados, water consents being a constraint for the latter."

There were 159 Northland lifestyle properties sold in the three months to February 2018 for a median price of $440,000, down from $450,000 in January and $447,000 in February last year. The median price for the 1530 lifestyle properties sold nationally in the three months to February 2018 was $650,000 — $50,000 higher than a year earlier.¦