Opinion: Warning - Mycoplasma bovis may affect property sale

For farms under contract for a change of ownership at the season end, M. bovis is particularly challenging. Photo / Supplied to the NZ Herald by Dairy NZ

As anyone involved in the rural industry will know, the impacts of the Mycoplasma bovis (M. bovis) cattle disease are likely to be far reaching; regardless of whether it will eventually be eradicated or not.

First found in the country in Oamaru in July 2017, M. bovis has to date been found on 25 farms, including dairy platforms and grazing blocks, in Otago, Southland, South Canterbury, Canterbury and the Hawkes Bay. Many more farms are under investigation having been linked to an infected property.

With the May/June season change approaching, the impact of M. bovis on farmers in the market to buy or sell a farm or buy or sell livestock, sharemilkers changing farms, and even graziers, is starting to be felt.

For farms under contract for a change of ownership at the season end, M. bovis is particularly challenging.

Livestock are often part of a sale contract for a farm. Those contracts normally detail animal health requirements for the herd; usually considered during the stock valuation just prior to settlement. M. bovis may change that.

Before committing to a purchase, any purchaser of a farm will want to know that the farm is not under movement control by the Ministry of Primary Industries (MPI) under the Biosecurity Act 1993, and that none of the herd are infected by M. bovis.

Testing for M. bovis is currently underway in a national surveillance milk testing programme being rolled out by MPI, DairyNZ and individual dairy companies. Testing involves the testing of bulk milk and discard milk (from dairy cows with mastitis or suspicious symptoms); the latter having a second test two weeks later to ensure full results are obtained. Testing labs are overloaded and under pressure and test results can take a while to be received.

This puts pressure on timeframes under a sale contract for a farm, delaying purchasers' ability to commit, and certainty for vendors wanting to move on. It has already been an issue for conditional sales contracts this season.

For farmers looking to sell, early action should be taken to minimise the possible impact of M. bovis. As well as continuing to comply with MPI guidelines to limit biosecurity risks, including avoiding herd contact with other livestock and ensuring equipment is thoroughly cleaned, farmers should also ensure their animal health records are up to date and all stock movements are recorded.

Farmers looking to purchase will need to be even more vigilant in their investigation of a farm before committing. As well as ensuring the farm is not subject to an MPI movement control notice, a purchaser should also:

- Receive the results of the bulk milk test on the herd, if it has been completed. Obvious difficulties arise if test results are not available and a purchaser should take proper advice on whether to commit to a purchase before results are received.

- Ask thorough questions about herd movements on and off the property (including where stock were wintered), and if any new stock have been obtained, where they were purchased from and whether they were kept separate from the rest of the herd for a quarantine period.

- Enquire about animal health – including any issues with calf health, mastitis, pneumonia, ear infections and swollen joints.

- Ask thorough questions about biosecurity measures taken on the property.

Purchasers should also ensure their lawyer is familiar with the M. bovis issue. No one solution will apply and sale contracts should include provisions outlining the consequences, both for the land and the livestock purchases, if M. bovis is found on the farm or the property receives an MPI movement control notice. Failure to do so could result in the end of season ownership changes being even more challenging than usual.

Emma Tomblin is part of the Duncan Cotterill Christchurch commercial team and a member of the Property Law Section of the New Zealand Law Society.