Dairy farm prices slump in spite of payout
A higher forecast dairy payout hasn’t been enough to halt falling dairy farm prices.
Data from the Real Estate Institute of NZ (REINZ) showed an 18 per cent slump in the median price per hectare paid for dairy farms in the past 12 months.
REINZ rural spokesman Brian Peacocke said although the milk price for the current season was better than last year, there were other factors at play.
Fonterra has set a forecast farmgate milk price of $6.75 per kilogram of milksolids for the year to September 2019, 25c/kgMS lower than the previous forecast but still high historically.
However, the co-op has seen changes at the top in recent months, and earlier this month announced its first ever net loss after tax of $196 million for the 2017-18 year.
‘‘Focus on the volatility within Fonterra is causing some producers to overlook the fact that the milk price for the current season is better than last year,’’ Peacocke said.
For the three months ended August
2018, the median price per hectare for dairy farms was $30,830, compared to $31,881 for the three months ended July 2018, and
$37,842 for the three months ended August
2017.
The news was brighter for horticulture farmers who were benefiting from record produce prices and had seen land prices surge 61 per cent in the past year, Peacocke said. In the three months to August, the median price per hectare for horticulture farms was $255,351 compared to $281,468 for the three months ended July and $158,546 for the three months ended August 2017.
Overall, sales volumes for all farms in the three months to August were reasonably consistent compared to 12 months ago but well down on the same period in 2016, Peacocke said.
Grazing farms accounted for the largest number of sales with a 40 per cent share. Finishing farms made up 28 per cent of sales, horticulture accounted for 12 per cent and dairy properties were 7 per cent of all sales.
The median price per hectare for all farms sold in the three months to August
2018 was $19,792 compared to $27,928 recorded for three months ended August
2017, a fall of 29.1 per cent.