First signs of shift from dairy

Some Northland farmers are reported to be considering selling dairy cattle

Some Northland farmers are switching from dairy to beef in response to the economic situation, according to the Real Estate Institute of New Zealand (REINZ).

The move was highlighted in the latest institute rural sales report, which records five dairy units and 30 grazing properties among the 45 Northland farms sold in the three months ended July 31.

Asked about the signs of change in the region, REINZ rural spokesman Brian Peacocke told the Northern Advocate: "We are getting reports that in some instances dairy farmers are looking at selling their herds and going into beef.

Hereford cattle

"They are isolated instances and, until we get more volume to suggest it is a trend, we will monitor it closely."

In the REINZ report for rural sales to July 31 - produced last Wednesday shortly before global dairy auction prices rallied by almost 15 per cent, ending a 10-sale losing streak - Mr Peacocke said the recently reduced Fonterra payout forecast of $3.85kgMS had confirmed widespread expectations within a marketplace anticipating a downturn this season.

"The key issue for many is the time prices are likely to remain at current levels, with particular concerns being expressed for lower order and 50/50 sharemilkers," he said. "Culling of lower performing animals is evident and the retention of surplus assets is under review."

Meanwhile, Northland was among 12 regions which showed increases in lifestyle property sales, with 242 in the region in the three months to July 31, up 102 on the same period last year.

The national lifestyle property market lifted 36.4 per cent - up 563 sales - in the three months to July 31 compared with the same period last year, and a $5.22 billion sales record was set for the year to July 2015.

The five Northland dairy farms sold in the three months to July 31 had a median sales price per hectare of $19,205 - the second lowest regional price in the country behind West Coast on $12,998 a hectare.

Canterbury had the top dairy farm median sales price of $46,173 a hectare and the median price for 41 dairy farm sales nationally was $35,304 a hectare.

The 30 Northland grazing farms sold in the three months to July 31 had a median sales price per hectare of $12,175, up from $9820 in July last year.

The median price for 192 grazing farm sales nationally to July 31 was $15,824 a hectare, only $324 more than last July.

Northland recorded two arable farm sales with a median price per hectare of $68,304, four finishing farm sales with a median price of $14,564 a hectare, and one forestry block sale of $3909 a hectare in the three months to July 31.

National median sales prices per hectare were: arable $51,438, finishing, $30,559, forestry $6472.

Three Northland horticulture blocks sold in the three months to July 31 had a median sales price per hectare of $115,052, while the 60 horticulture properties sold nationally averaged $225,912 a hectare.

The REINZ figures show there were 79 fewer farm sales (-15.4 per cent) for the three months ended July 31 than for the three months ended July 2014.

Overall, there were 433 farm sales in the three months ended July 2015, compared to 479 farm sales for the three months ended June 2015 (-9.6 per cent), and 512 farm sales for the three months ended July 2014.

A total of 1719 farms were sold in the year to July 2015.