Dairy farms a hard sell as boom ends

The days of endless dairy growth appear to be over as farmers look elsewhere instead of chasing the white gold.

Dairy expansion, whether it’s from land conversions or farmers buying existing farms, appears to have slowed from the heady days of 2014’s dairy land price boom.

Instead, latest figures show an easing of land values and large numbers of properties remaining unsold throughout the spring and summer – traditionally the busiest period of the year for farm sales.

And dairying land use appears to be receding from its high tide mark as an emerging number of farms are switched to horticulture, cropping and sheep and beef finishing across the country.

These new conversions would be the main story in the rural real estate market in the next few years, PGG Wrightson general manager of real estate Peter Newbold said.

‘‘An example would be a marginal dairy farm in Bay of Plenty going back into horticulture.’’

The company had sold a handful of farms where the new owner planned to grow kiwifruit.

Although it was not a sign the dairy industry was in demise, he doubted it would expand.

Real Estate Institute of New Zealand rural spokesman Brian Peacocke said farmers were switching from dairying back to sheep and beef in Northland, southern Hawke’s Bay, Wairarapa and in Southland.

Both confirmed there were a significant number of dairy properties on the market.

Peacocke said some vendors had not accepted that values had eased and were holding out for an unrealistic price.

While REINZ’s statistical data showed an increase in the median price per hectare for dairy farms, Peacocke said the true story was not being told.

‘‘There is little demand for second or third tier properties. The good ones are still selling really well.’’

Many farmers had reached retirement age and were fed up with increased compliance costs and dissatisfaction with their milk processing company. For some there was frustration with the perceived lack of empathy emanating from central government, he said.

Availability of farm labour was another major factor.

Peacocke said a generational change was occurring with farm ownership in New Zealand.

Newbold said the dairy market was at the bottom of the cycle. ‘‘If you go back and look at the stats, 2014 was the peak. It’s not all doom and gloom, there just needs to be a re-think.’’