64 dairy farms for sale in south
It was once the white gold of the south but now some dairy farmers are struggling to get rid of their farms as confidence in the industry continues to slump.
There are 64 dairy farms listed online for sale in Southland, with many staying on the market for more than a year.
PGG Wrightson Real Estate Southland real estate manager Andrew Patterson said while exact figures for last year were not available, the number of farms presently for sale was higher than the same time last year.
Business confidence slumped in the wake of a series of Fonterra milk price drops, the latest to $3.85 in August, well below DairyNZ’s break even price of $5.40.
Farmers would not start spending until their financial situations and the outlook for the next payout improved, Patterson said.
‘‘There’s a myriad of reasons why they’re doing it [selling] but the underlying factor is definitely the payout.’’
However, some farms had been able to sell.
PGG had good sales volumes for dairy properties listed between $1 million and $4m, but the farms in the $5m to $10m bracket were selling much slower than they traditionally had, he said.
Of the listings, most were listed for about $6m, with the cheapest for $3m and the most expensive asking for more than $20m.
Harcourts rural manager Murray Jackson said many dairy farmers were just getting tired of working hard hours for little or no money in the end.
But the farms were not selling quickly, with some on the market for more than a year and they were farms which would have sold easily in the ‘‘good days’’, Jackson said.
‘‘We’re having trouble finding buyers, there’s no return in the industry at the moment so it’s pretty hard to convince people that they’re a good thing to buy.’’
It is not all doom and gloom for dairy real estate sales, with some properties going for high prices.
Southern Wide Real Estate rural sales consultant Philip Ryan said the company sold seven dairy farms in December.
‘‘I think we’ve got a really good balance of farms at the moment, probably the best ever.’’
A 121ha Lochiel dairy farm was sold at auction for $46,000 a hectare, which was a ‘‘good quality’’ property in a good location, he said.
Farmers who were selling were likely to be retiring or upsizing to a bigger property, he said.
Federated Farmers president Allan Baird said farmers were reluctant to sell their properties for less previously listed, but buyers wanted tp pay less.
The cyclical low in payouts had resulted in many uncertainties for farmers and they did not want to be in a position where they were unable to service their loans or debt, he said.
But as business confidence rose so too would sales, he said.