The two farms, near Clive between Napier and Hastings, sold for more than $12.5 million after some hectic bidding in the Bayley’s Napier auction room with multiple parties bidding on each property. Both farms were bought by Hawke’s Bay farmers with existing rural properties.
“Some 58 farmers, stock managers, accountants and rural banking specialists from across the Hawke’s Bay were in the auction room to watch proceedings,” he said.
Bidding on the 351 hectare Ben Alpin farm opened at $3.9million. After 16 bids from four potential buyers, the property sold under the hammer for $5.02m.
On the nearby 468ha Trig Downs dairy farm bidding opened at $6m and rose in initial $100,000 increments from three bidders before finally selling for $7.5m.
Brooks said the farms drew strong interest from farmers looking to upsize their dairy production – particularly in light of Fonterra’s latest $8.30/kg MS payout and the prospect it could rise to even higher levels around the $8.80 mark.
“The underlying consensus among those in the auction room, both potentially buying and from an analytical perspective, was that dairy production is about to head into another upward pricing cycle,” Brooks said.
“That has obvious ramifications for dairying land.
“The big difference we have seen now from previous such cycles is that potential buyers are basing their purchase price more on return on investment rather than capital gain expectations.
“That is a fundamental shift from an historical psyche to a more business-focused buying approach.”
Brooks said the Trig Road property was converted to dairy production in 2009 and this season was on target to milk 1000 cows producing 356,340kg MS.
Ben Alpin was milking 650 cows and targeting 218,000kg MS this season.
The farms were jointly marketed by Glyn Rees-Jones and Hadley Brown from Bayleys Hawke’s Bay.
