Easing dairy farm prices start to show up

Prices for dairy farms have declined over the three months ended August.

Agencies have recently reported how the rural sector has held up but commentators expect the fall in dairy payouts to become more apparent over the coming spring and summer.

In general, rural property has held up but some sectors have eased.

The median sales price per hectare for dairy farms fell to $26,906 (over 21 properties sold), compared with $35,304 for the three months ended July (41 properties) and $43,125 (26 properties) for the three months ended August 2014.

The median dairy farm size was 130ha and the median production per hectare across all dairy farms sold in August 2015 was 998kg of milk solids.

The REINZ Dairy Farm Price Index rose despite the falling prices for statistical reasons – it makes adjustments for differences in farm size and location compared with the median price per hectare, which does not adjust for these factors, REINZ says.

Over all the different farm sectors, there were 20 fewer farm sales (-4.9%) for the three months ended August than for the three months ended August 2014.

There was a total of 387 farm sales, compared with 433 farm sales for the three months ended July (-10.6%), and 407 farm sales for the three months ended August 2014.

The median price per hectare for all farms sold in the three months to August 2015 was $27,872 compared with $26,590 recorded for three months ended August 2014 (+4.8%).

Finishing farms had a median sale price per hectare of $26,038 (69 properties), compared with $30,559 for the three months ended July 2015 (78 properties), and $30,194 (66 properties) for the three months ended August 2014.

Grazing farm median prices per hectare rose to $16,998 (175 properties) compared with $15,824 for the three months ended July 2015 (192 properties), and $14,995 (192 properties) for the three months ended August 2014.

Horticulture farm median prices per hectare fell to $190,903 (64 properties) compared with $225,912 (60 properties) for the three months ended July 2015, and $126,236 (52 properties) for the three months ended August 2014.

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