According to website realestate.co.nz, there are 66 dairy farms offered for sale in Northland, and 74 in Southland.
In dairy strongholds such as Waikato (75 offered) and Taranaki (40), the levels of farms on the market are not unusually high. There are 31 on sale in Canterbury.
A real estate agent who did not want to be named said he had heard there was a «fair bit of debt in Northland, maybe the banks want to get it resolved soon.»
Federated Farmers Northland spokesman Ashley Cullen said that he had heard similar sentiments.
«I’ve heard there are a few like that but whether you can blame this season on it, I don’t know. They were marginal before, it’s putting the squeeze on and if they haven’t done the production they had hoped for, that’s a double whammy – low production and a low payout,» Cullen said.
Some farmers were putting farms on the market to see if there were any bites.
Cullen said he also knew of farmers wanting to sell to go bigger.
«While the price of cows and dairy shares is low they are looking at an opportunity to expand without losing a lot of money.»
Ray White Whangarei real estate salesman Peter Ogle said good farms were still selling.
«I’m getting unconditional contracts on good property but those have to have good amenities, housing, and be of a better standard than average. But it’s not a secret that there are marginal properties in Northland,» Ogle said.
Another Northland agent who wanted to remain anonymous said the whole economic situation was uncertain, especially with regard to commodities, and that was reflected in the high level of farm sales.
In relation to banks pressuring farmers, he said «Federated Farmers have grasped the situation».
Waikato PGG Wrightson agent John Sisley said the Waikato was «about on a par» with last year, although he did not keep a very accurate record.
Asked about prices, Sisley said the average in the Waikato was $46,000 at the end of last year, exactly the same as the year before.
However Real Estate Institute of NZ figures show that dairy prices for the country had fallen year on year.
In October 2014 the median price per ha for the previous three months was $43,299 but a year later it was down to $31,552 for the same period, a fall of almost $12,000.
Cullen said Fonterra should not have been so bullish with its prices early in the season.
«I was quite annoyed when Fonterra upped the advance rate early in the season because I didn’t feel the market had righted itself at that stage. I’d rather they erred on the side of caution,» he said.
The reports of elevated levels of farms offered in Northland was supported by the recently released Westpac McDermott Miller Regional Economic Confidence Survey, which shows confidence has dropped in the region.
By contrast, dairy-exposed regions reported increased optimism after Fonterra’s payout was revised up to $4.60 per kilogram of milk solids, from $3.85/kgMS in September.
However, the survey took place before the most recent global dairy auction, showing a fall in prices.
Source: Stuff
