Fifteen dairy farms sold for a total of $125 million. That compared to the $126m for the 16 farms sold to New Zealand buyers in the 2016/2017 season.
Registered valuer Greg Petersen said he was unaware of any new dairy farm sales to overseas buyers since the September 2017 general election. That was in direct contrast to the 2013/2014 season where there was $171m of direct foreign investment in Canterbury dairy farms.
Petersen said the effect of fewer international buyers would be hardest felt by larger properties above $10m and beyond the reach of the New Zealand farmer. Vendors putting these properties on the market might consider subdivision or reducing their asking price, he said.
M.bovis was affecting dairy farmers state of mind and the results of the early season bulk milk testing would provide an early gauge on the extent of the disease and the likelihood of eradication, Petersen said.
He also said that due to the lack of buyers the value gap between high-quality properties and poorer quality properties was likely to widen. There was pressure from financiers for some of these to be sold and debt repaid after the recent dairy downturn.
The Canterbury Land and Water Regional Plan had the potential to curb production on most farms. Those with a high level of production tended to import a lot of feed. As dairy farms were assessed against the Environment Canterbury Good Management Practice benchmark, valuers anticipated that the dairy market would mature and place more emphasis on factors driving long-term production: soil type, secure low-cost irrigation water, and quality infrastructure
Farms getting water from irrigation schemes providing the lowest cost, most reliable water would be more sought after in the future, Petersen said.
«We are starting to see a preference for farms getting water from an irrigation scheme that holds the nutrient discharge consent compared to a farm getting water from ground or surface takes with an individual consent, together with the requirement for a separate consent to farm.
«Dairy farms situated in higher cost irrigation schemes or those with short-dated ground or surface water consents may also struggle to sell in the current market where the reduced number of buyers have greater choice,» Petersen said.
June to September was a busy time on dairy farms and often listing were pulled from the market until mid-spring. As a result, there had been few new sales and little sign of the direction the market would take into the 2018/2019 season. Its likely purchasers would hold off until those farmers needing to sell accepted a lower price.