Dairy support units leading the charge as high confidence pervades the rural sector across the board

Soaring farm sales are reflecting the positive mood prevailing in the rural sector with the most sales in a 12-month period since February 2009 just recorded.

They were up over 40% for the three months ended January, compared with the same period last year.

The REINZ all farm price index rose by almost 10% but the price per hectare has fallen.

There were 165 more farm sales (+41.4%) for the three months ended January 2014 than for the three months ended January 2013. It was also the highest number of January sales for seven years and the most finishing sales for 10 years.

The biggest movement in January was in dairy support with finishing farms up from 16 to 27 and grazing 39 to 68. Overall sales in the month were up from 90 to 138 in the month and up from 178 to 250 in December.

There were 564 farm sales in the three months to end of January 2014, compared to 554 farm sales for the three months ended December 2013 (+1.8%). 1,794 farms were sold in the year to January 2014, 23.3% more than were sold in the year to January 2013, the largest number of sales in a 12 month period since February 2009.

The median price per hectare for all farms sold in the three months to January 2014 was $22,644 compared to $23,980 recorded for three months ended January 2013 (-5.6%). The median price per hectare fell 6.3% compared to December.

The REINZ All Farm Price Index rose by 2.3% in the three months to January compared to the three months to December, from 3,256.1 to 3,332.2. Compared to January 2013 the REINZ All Farm Price Index rose by 9.6%. (The REINZ All Farm Price Index adjusts for differences in farm size, location and farming type compared to the median price per hectare, which does not adjust for these factors.)

Eleven regions recorded increases in sales volume for the three months ended January 2014 compared to the three months ended January 2013. Otago recorded the largest increase in sales (+35 sales), followed by Southland (+31 sales) and Taranaki (+27 sales). Two regions recorded decreases in sales volume with Nelson recording the largest fall (-7 sales), followed by Auckland (-4 sales). Compared to the three months ended December 2013, nine regions recorded an increase in sales.

“The increase in sales volumes for the three months to the end of January is an indication of the positive mood prevailing throughout the rural sector”, says REINZ Rural Spokesman Brian Peacocke, “most regions are seeing solid demand for dairy, dairy support and sheep and beef properties.”

Grazing properties accounted for the largest number of sales with 42.2% share of all sales over the three months to January, Finishing properties accounted for 21.1%, Dairy Properties accounted for 22.5% and Horticulture properties accounted for 6.4% of all sales. These four property types accounted for 92.2% of all sales during the three months ended January 2014.

The median sales price per hectare for dairy farms was $36,509 (127 properties), compared to $38,267, for the three months ended December (121 properties), and $35,530 (82 properties) for the three months ended January 2013. The median dairy farm size for the three months ended January 2014 was 123 hectares.

Included in sales for the month of January were 25 dairy farms at a median sale value of $22,634 per hectare. The median farm size was 138 hectares with a range of 42 hectares in Waikato to 495 hectares in Manawatu/Wanganui. The median production per hectare across all dairy farms sold in January 2014 was 639 kgs of milk solids.

The REINZ Dairy Farm Price Index fell by 2.9% in the three months to January compared to the three months to December, from 1,943.4 to 1,886.2. Compared to January 2013 the REINZ Dairy Farm Price Index rose by 7.8%. The REINZ Dairy Farm Price Index adjusts for differences in farm size and location compared to the median price per hectare, which does not adjust for these factors.

The median sale price per hectare for finishing farms was $20,720 (119 properties), compared to $21,289 for the three months ended December (111 properties), and $18,852 (69 properties) for the three months ended January 2013. The median finishing farm size for the three months ended January 2014 was 106 hectares.

For the three months ended January 2014 the median sales price per hectare for grazing farms was $13,995 (238 properties) compared to $16,308 for the three months ended December (237 properties), and $16,250 (176 properties) for the three months ended January 2013. The median grazing farm size for the three months ended January 2014 was 84 hectares.