Despite the fall in turnover median farm prices firmed.
There were 40 fewer farm sales in the three months ended November 2014 than for the three months ended November
2013. Overall, there were 374 farm sales in the three months to end of November 2014, compared to 346 farm sales for the three months ended October 2014 (+8.1%) and 414 farm sales for the three months to the end of November 2013. 1,879 farms were sold in the year to November 2014, 12.3% more than were sold in the year to November 2013.
The median price per hectare for all farms sold in the three months to November 2014 was $29,834 compared to $24,056 recorded for three months ended November 2013 (+24.0%). The median price per hectare rose 8.3% compared to October.
Dairy farms accounted for 14.7% of farm sales in the three months to November 2014. During this period the median sales price per hectare for dairy farms was $36,825 (55 properties), compared to $43,299 for the three months ended October 2014 (23 properties), and $40,023 (69 properties) for the three months ended November 2013. The median dairy farm size for the three months ended November 2014 was 102 hectares.
Included in sales for the month of November were 37 dairy farms at a median sale value of $36,174 per hectare. The median farm size was 108 hectares with a range of 35 hectares in Taranaki to 561 hectares in Waikato. The median production per hectare across all dairy farms sold in November 2014 was 1,004 kgs of milk solids.
The REINZ Dairy Farm Price Index fell by 6.4% in the three months to November compared to the three months to October, from 2,381.0 to 2,229.4. Compared to November 2013, the REINZ Dairy Farm Price Index rose by 20.8%. 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.
The REINZ All Farm Price Index rose 5.0% in the three months to November compared to the three months to October, moving from 3,123.2 to 3,278.1. Compared to November 2013 the REINZ All Farm Price Index rose by 1.9%. The REINZ All Farm Price Index adjusts for differences in farm size, location and farming type, unlike the median price per hectare, which does not adjust for these factors.
“Regional reports again confirm strong activity on quality well located farms with purchasers being particularly diligent in their selections”, says REINZ Rural Spokesman Brian Peacocke, “The consistent pattern around the country is that 2nd tier properties are struggling to attract meaningful attention.”
“While sales volumes in the three month period ending November are down marginally, most areas report prices holding reasonably well in comparison to the same period 12 months ago. The exception, however, is the Waikato region which has witnessed some extraordinary sales.”
Highlights Include:
- Strong sharemilker enquiry for first farm purchases in Northland, although uncertainty regarding the payout for next season is a constraining factor;
- Some exceptionally strong dairy farm sales in the Waikato where record prices have been paid for Tatua supply properties and selected Fonterra farms in the Morrinsville / Matamata catchment. Central to southern Waikato and northern King Country have experienced good solid activity on dairy units, but cautious responses to sheep, beef and dairy support units. Second-tier properties are currently being overlooked even though they remain viable investment opportunities;
- Strong buyer enquiry in Taranaki is maintaining a solid dairy market. Sheep and beef properties are experiencing limited interest.
- A very selective market in the Wairarapa with buyers focussing strongly on the few quality properties available. Second-tier farms are difficult;
- Values remain steady on the West Coast where cautious first farm purchasers are basing decisions around the economic outlook;
- The November market in Canterbury is strong for dairy, with solid activity surrounding sheep, beef and non-dairy properties with good soils, either with or without irrigation.
- A slow market in Otago with a lack of dairy influence on finishing and grazing country, and limited enquiry generally; and
- A solid market in Southland with quality dairy farms peaking at $46,000 per hectare and good sheep and beef units making up to $1,000 per stock unit. Purchasers are reported as being increasingly cautious with their decision making.
