Tuesday, 19 July 2016 15:35

Dairy farms values down 8-18%

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Indications are that dairy farms values in most regions are down 8-18% in value, says the Real Estate Institute of New Zealand (REINZ).

The month of June saw minimal activity with seven sales for the month, REINZ says.

There's been reasonable enquiry for good properties with limited listings and emerging enquiry regarding values for the 2016/2017 season.

There's increasing enquiry for 1000-3000 cow units in the South Island where the cost of water is now consistently being factored into decision making.

From a pricing perspective, the Dairy Farm Price Index indicates an easing of 18% in the last 12 months, but only a 2.2% drop from five years ago, REINZ says.

For the three months ended June 2016 the median sales price per hectare for dairy farms was $32,615 (46 properties), compared to $33,507 for the three months ended May 2016 (60 properties), and $35,531 (64 properties) for the three months ended June 2015.

The median price per hectare for dairy farms has fallen 8.21% over the past 12 months. The median dairy farm size for the three months ended June 2016 was 124ha. On a price per kilo of milk solids basis the median sales price was $35.29/kgMS for the three months ended June 2016, compared to $28.96/kgMS for the three months ended May 2016 +21.86%), and $40 for the three months ended June 2015 (-11.78%). Included in sales for the month of May 2016 were seven dairy farms at a median sale value of $39,141/ha. The median farm size was 80ha with a range of 39ha in Waikato to 919ha in Otago.

The median production per hectare across all dairy farms sold in June 2016 was 919kg/MS. The REINZ Dairy Farm Price Index fell 9.1% in the three months to June 2016 compared to the three months to May. Compared to June 2015, the REINZ Dairy Farm Price Index fell by 18.1%. The REINZ Dairy Farm Price Index adjusts for differences in farm size and location compared to the median price per hectare, which does not adjust for these factors.

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