Record dairy payout pushes up land price

The price of farm land has increased nationally by up to 40 per cent in the past year and the number of sales has more than doubled as prosperous times on the farm translate to increased demand.

Last week's announcement of a record milk payout to dairy farmers is not expected to add to higher prices as many farmers had already taken better incomes into account when determining land prices.

Many predict a final payout this season of about $5 a kilogram of milk solids.

The Dairy Board has confirmed that farmers will receive $4.60 - $1.25/kg higher than last year. Dairy companies are yet to announce their payout, which is expected to add a further 40c a kilogram.

For a farmer milking 460 cows, that equates to an extra $194,000 in gross income over last year, taking his total gross income for the season to more than $800,000.

The payout is expected to boost the national economy by more than $2 billion.

Reid Farmers rural real estate manager Craig Bates said farm values nationally had increased about 32 per cent in the past year, with dairy land rising up to 40 per cent, sheep and beef grazing farms 30 per cent, arable farms 29 per cent and finishing properties 16 per cent.

A shortage of all types of land was also fuelling prices, Mr Bates said.

A Wanganui hill country farm sold for $1,181,000 at auction last week.

Falls Trust, a 395ha property just north of Raukawa Falls, 60km from Wanganui on State Highway 4, was sold by Dick Coleman and daughter Jan Blinkhorne to neighbours Don and Bruce Bristol.

The government valuation, although several years old, was $650,000.

Auctioneer Kim Shannon and Wrightson agent John Dalziel said the final price reflected the healthy state of the farming sector.

Meanwhile, farmers will get the opportunity to voice concerns about the proposed merger of the country's two biggest dairy companies, New Zealand Dairy Group and Kiwi Co-operative Dairies, at meetings beginning tomorrow.

GlobalCo chairman John Roadley last week started an 18-day circuit of farmer meetings covering both manufacturing companies.

Farmers will vote on June 18 about the proposal.

New Zealand Dairy Group will hold its special meeting for over 7000 shareholder farmers at the Totara Christian Centre, Matamata, with video links to Ashburton and Invercargill.

Kiwi Co-operative Dairies will hold its special meeting, for over 600 dairy farmers scattered from Northland to Otago, at Hawera in Taranaki.

The merger agreement was set to run out last week but GlobalCo has extended it until September 30.

Legislation backing the merger was expected to be introduced to Parliament on June 11, but the Government is looking at delaying it until after the farmer vote.

The vote requires at least 75 per cent support for the merger to go ahead.

When they make their decision, farmers will have an alternative proposal before them, put forward by a group of Taranaki dairy farmers.

The group, led by former Federated Farmers Dairy president Mark Masters, will unveil its alternative plan in Wellington tomorrow.

Mr Masters has indicated that the alternative scheme will be designed to maintain domestic competition in the industry by preserving at least one other milk processing co-operative besides GlobalCo.

- NZPA