In Northland, there were indications of some top-end dairy farms on good soils possibly going into horticulture, and at the bottom end into beef.
A lack of confidence in the wider Bay of Plenty area had caused a difficult dairy farm market, and in the southern North Island areas, dairy sales were hard work both at the top and lower ends of the market, REINZ rural spokesman Brian Peacocke said.
Across all farms, sales activity picked up in the three months to the end of November, with 336 sales, well up on the October figure, and 20 more than in the November period a year earlier. For the year to the end of November 1486 farms were sold, a nearly 6% reduction on the 2017 tally, with dairy farms sales down just over 11% year-on-year.
The median price for all farms sold in the November quarter was $30,411/hectare, a 13.5% lift on the $26,802 a year earlier, and considerably up on the October 2018 figure of $27,121/ha.
The REINZ All Farm Price Index rose 3.6% in the period through November and the year-on-year gain was 2.5%. The index adjusts for differences in farm size, location, and farm type, whereas the median price figure does not make those distinctions.
Some bigger sales in the November quarter lifted the dairy farm sale median price to $50,964/ha (on 36 sales) compared to just $28,555 (11 sales) for October, and it was also ahead of November 2017 figure of $44,154 (46 sales).
The median price rose 15.4% year-on-year, but the REINZ Dairy Farm Price Index, despite a quarterly lift of 8.3%, was down 8.6% year-on-year. This index also adjusts for farm type, size, and location.
The best levels of sales activity compared to the 2016 and 2017 years were in finishing farms, Peacocke said, with lower activity across dairy, grazing, and arable. November period horticulture sales were higher than 2017 but below 2016, and forestry sales were relatively stable. For the November period, the median price of finishing farms was $32,635/ha (112 sales), just lower than the $32,969/ha figure for October (77 sales), but well up on the November 2017 median of $28,641/ha, a year-on-year gain of nearly 14%.
Reports from the regions were that significant numbers of farms were for sale during the spring, specially dairy farms. Factors encouraging listings included the age and stage of life of farm owners, increasing charges, compliance and labour costs, dissatisfaction with a processing company, and among some farmers frustration with “the perceived lack of empathy” from central Government.
Vendor price expectations and reduced confidence among purchasers were reasons why a number of farms have failed to sell.
Regional highlights:
Northland: Strong activity on land suitable for avocado and kiwifruit.
Waikato: Many dairy farms for sale, with sales reflecting vendors adjusting to easier prices. Strong results in east Waikato; good results for finishing and dairy support properties.
Bay of Plenty/Rotorua/Taupo: Quiet in horticulture, lack of confidence impacting dairy.
Taranaki: Work required to complete transactions, some vendors with unrealistic price expectation now taking properties off the market; values down about 10-15%.
Hawkes Bay: Strong demand from local buyers for quality deer and finishing farms, but prices constrained and high livestock prices becoming a deterrent.
Manawatu/Wanganui/Wairarapa: Harder work on dairy farms; solid activity in good sheep and beef farms.
Nelson/Marlborough: Buoyant market for limited number of finishing and grazing farms; strong demand in viticulture, including unsatisfied demand from corporates for large greenfield sites.
Canterbury: Difficult dairy market; Overseas Investment Office (OIO) policy change means a lack of larger property sales, halting the “trickle-down effect from freed-up capital”. Reasonable activity for finishing farms.
Otago: Reasonable finishing and grazing activity; concern about OIO criteria.
Southland: Patchy market; very strong in arable sector but dairy difficult despite significant price reductions.
For grazing farms, the median price in the November period was $11,835/ha (93 sales), compared to $11,335 (90 sales) for October, and $11,881/ha (99 sales) for the November quarter in 2017.
