Saturday, 29 August 2015 08:30

Farm sales dip

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The low payout may starting to affect farm sales in the dairy sector.

The Real Estate Institute of NZ Dairy Farm Price Index fell by 13% in the three months ending in July compared to the three months to June and 12.1% compared to the same period last year.

For the three months ended July 2015 the median sales price per hectare for dairy farms was $35,304 (41 properties) compared to $35,531 for the three months ended July 2015 (64 properties) and $36,673 (47 properties) for the three months ended July 2014. 

“The recent Fonterra dairy payout announced confirmed widespread expectations within a market place anticipating a downturn in the current season,” says REINZ rural spokesman Brian Peacocke.

“The key issue for many is the time prices are likely to remain at current levels, with particularly concern being expressed for lower order and 50/50 sharemilkers.

“Banks generally appear to be supportive, but conversations are taking place given circumstances being appropriate. Across the board, culling of lower performing animals is evident, and the retention of surplus assets is under review.”

Recent trends seen include:

Prices holding firm in the Waikato for those few dairy farms sold in July

Early indications of some farmers in Northland initiating a change in land use from dairy to beef, purely in response to the economic situation.

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