Wednesday, 24 July 2019 12:55

$8.35m farm sale could strike a match

Written by  Nigel Malthus
Hilderthorpe dairy farm which recently sold for $8.35 million. Hilderthorpe dairy farm which recently sold for $8.35 million.

PGG Wrightson says the recent sale of a Lower Waitaki dairy farm for $8.35 million could “re-ignite” the market for dairy property.

Dave Heffernan of PGG Wrightson Real Estate, Oamaru, who marketed the 178ha farm at Hilderthorpe, south of the Waitaki River, said few dairy farms have sold in recent months.

“Although recent transactions have been rare, the sale value of about $47,000 per hectare is close to what this farm would have made two years ago.”

While many vendors seek $50,000 a hectare, few are selling at that price, Heffernan said.

The farm was listed in January and sold in June to a local buyer. 

“We also received interest from several other parties, indicating that farms with low cost reliable water, good soils and proven production should achieve values that satisfy realistic vendors,” he said.

The farm produced 250,000kgMS from 580 cows in the 2019-20 season. 

The sale did not include plant and equipment but the buyer has bought the herd (in a separate transaction) and a contract to supply Oceania. 

Heffernan said because would-be Oceania suppliers do not need to buy shares or join a supply waiting list, the supply contract was a big incentive for the sale.

Oceania has been owned since 2013 by the Chinese dairy giant Yili, currently awaiting regulatory approval for its proposed purchase of Westland Milk Products.

Yili says it has invested $650m in setting up milk powder, infant formula and UHT production lines at the Oceania plant just north of the Waitaki River, and that it is paying suppliers above the industry average.

PGG Wrightson Real Estate North Otago branch manager John Sinnamon said the Hilderthorpe sale was a positive signal to a stalled market.

“Several factors, including Mycoplasma bovis and banks adhering to tighter lending criteria, have increased recent levels of buyer caution. However, this sale shows them more attuned to current market expectations, while vendors are willing to take innovative steps to achieve the best outcome.

“In the current market you have to be more innovative to achieve a sale. For example, vendors might opt to retain a proportion of equity in a farm for a limited term. 

“This sale proves that realistic vendors can reach agreement with motivated purchasers, which is necessary for the rural property market to remain active. It also shows purchasers remain interested.”

More like this


The Hound reckons news that an Austrian billionaire has been granted consent to purchase an $8m Hill Country farm, is living proof that the NZ First’s billion tree policy is a disaster for farming in this country.

Fewer farms changing hands

Just two dairy farms have changed hands in Canterbury/North Otago in the current season, according to the just-released Colliers Dairy Property Market Review for 2020.

Wool auctions back in action

Wool trading on both sides of the Tasman is back up and running after a cyberattack on industry software provider Talman.

Farm sales start to look up

Farm sales were down 21.6% for the three months ended December 2019 versus the year prior ­— but sales look to be lifting.



Being a good boss during calving

Despite it being a busy time, being a good boss during calving is absolutely achievable, says DairyNZ’s People Team leader Jane Muir.

SFOTY in hot water over social media posts

Organisers of the NZ Dairy Industry Awards are investigating unsavoury social media comments allegedly made by the newly crowned 2020 Share Farmer of the Year, Nick Bertram.

» The RNG Weather Report

» Latest Print Issues Online

Milking It

A ticking timebomb?

There could be another dairy health scare brewing in China and this one starts in our backyard.

Please explain

Does anyone in the Government understand the essential role St John Ambulance has in our society?

» Connect with Dairy News

» eNewsletter

Subscribe to our weekly newsletter