Friday, March 29, 2024

Dairy, finishing farm sales fall

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Farm sales around the country continued to fall for the three months to April 30 with dairy and finishing farms the worst affected. Farm sales fell from 418 to 362, a drop of 56 or 13.4% compared to the corresponding period last year, Real Estate Institute figures show.
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There were 1443 farms sold in the year to April 30, 1.7% fewer than in the year to April 30 2018, with 31.3% fewer dairy farms, 9.3% fewer finishing farms, 22% more grazing farms and 5.7% more arable farms sold over the period.

The sales reflect a continuation of the trend in sales volumes evident over recent months, institute rural spokesman Brian Peacocke said.

“Compared to the equivalent period in 2018, sales volumes for dairy and finishing farms are well down, grazing units have increased, arable and horticulture properties are holding par.

“From a regional perspective, provinces such as Marlborough have recovered well and are experiencing a very good autumn whilst other regions, particularly throughout the Waikato, Hawke’s Bay and central to lower North Island are experiencing restricted pre-winter feed supplies in spite of having received modest levels of rain.

“In contrast, Southland has had sufficient moisture to cause paddocks to become almost too damp.”

Six of the 14 regions recorded increases in the number of farm sales for the three months to April 30 compared to the corresponding period last year, with Hawke’s Bay (+15), Gisborne (+7) and Taranaki (+7) the top performing regions. Waikato recorded the most substantial fall in sales (-29) followed by Canterbury (-20). 

Compared to the three months ended March 31, seven regions recorded an increase in sales with the biggest increase being in Bay of Plenty (+11 sales).

The median price a hectare for all farms sold in the three months to April 30 was $22,624 compared to $27,309 for three months ended April 2018, a drop of 17.2%. 

The median price a hectare fell 3.2% compared to March.

The all-farm price index fell 4.2% in the three months to April 30 compared to the three months to March 31. 

However, compared to April 2018 the index rose 5.7%. The index adjusts for differences in farm size, location and farming type, unlike the median price per hectare, which does not adjust for those factors.

There’s been plenty of activity in Northland around horticultural land suitable for kiwifruit and avocados, given the right soil type and adequate supply of water. 

The forestry sector has increased its activity and is competing with traditional buyers of sheep and beef farms, fueled in part by carbon credits being deemed more attractive than timber.

Waikato has experienced a tailing-off of dairy farm sales but has seen strong interest in finishing and dairy support properties, with very good prices achieved throughout the wider region.

Interest in Bay of Plenty horticulture properties continues to be strong with kiwifruit sales to the fore, both green and gold. That’s been tempered by restricted activity on dairy and grazing properties, with reports of only 15% of the properties on the market being sold.

Rain is needed in Hawke’s Bay to offset dry, windy conditions though good market prospects underpin steady sales of sheep and beef grazing units. Like Northland and Wairarapa, there is real concern regarding the intrusion of forestry into the pastoral sector.

It’s been quiet in Taranaki, with limited activity on runoffs and dairy support properties. Restricted listings have led to a number of buyers waiting for more options with a better range expected in spring.

Manawatu/Wanganui has seen strong activity at good prices for sheep and beef finishing and grazing properties throughout the region, particularly Tararua where a string of solid sales has taken place. Smaller finishing blocks close to the main centres have also been in demand.

River-restoring volumes of rain after an extended drought in Marlborough and Nelson have created a positive atmosphere in that region despite minimal sales. Neighbour to neighbour transactions are dominant and irrespective of a reduced viticulture harvest, demand for bare land suitable for grapes continues. 

The dairy and arable market in Canterbury is struggling with reports of banks advising clients to hold off in anticipation of market values easing in the future. 

As is the case elsewhere in the country, neighbour to neighbour transactions are key.

Steady sales for dairy, finishing and grazing properties continue in Otago with solid interest in versatile units covering beef, fine wool and deer. Concerns continue regarding changes to Overseas Investment Office criteria, which have restricted buyer inquiry and sales of larger properties, in some instances so valuable that few if any local buyers, if any can afford them. 

There are reports of banks having a significant influence on the market with an insistence on extra due diligence that, in some instances, is frustrating transactions.

Activity in the market for Southland dairy farms has been light with a number of properties withdrawn until conditions improve. Inquiries for sheep and beef finishing properties have been good, with solid activity on grazing units.

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