Lower dairy payout forecasts don't appear to have dampened farm prices, according to the latest figures from the REINZ and Bayleys Real Estate.
The median price per hectare for dairy farms sold in the three months to October was $43,299 compared with $32,701 in the same period last year.
However the number of sales declined, with 23 dairy farms selling in the three months to October, compared with 37 over the same three months of last year.
The REINZ Dairy Farm Index, which adjusts for differences in farm sizes and location, was up 7.3% on a year earlier.
Mark Dawe, the rural manager for Bayleys Waikato, said there had been particularly strong demand for dairying units in the $3 million to $6 million price range, with support blocks in the $1 million to $1.7 million range also sought after.
Bayleys had sold 11 dairy and grazing farms in the Waikato in the last two months, mostly to buyers who were already farming in the region, with prices for Waikato farms being higher than anywhere else in the country, Dawe said.
"It's like comparing the Auckland residential property market to the rest of the country, there's us, then there's the rest, with a big gap in between."
Farms sold by Bayleys at Auction in the last couple of months include:
369 Kereone Rd, Morrinsville. A 113 hectare dairy farm which sold for $8.45 million.
671 State Highway 31, Otorohanga. A 186 hectare dairy farm which sold for $5.3 million.
1142 Hetherington Rd, Huntly. A 163 hectare dairy farm which sold for $4 million.
139 Taylor Rd, Hamilton. A a 51.6 hectare dairy farm which sold for $3.3 million.
81 McWatt Rd, Maramarua. A 116 hectare dairy farm which sold for $3.3 million.
401 Front Miranda Rd, Waitakaruru. An 87 hectare dairy farm sold for $3.175 million.
2234 Maungatautari Rd, Maungatautari. A 25 hectare grazing block sold for $1.8 million.
787 Sate Highway 26, Newstead, Hamilton. A 20.3 hectare grazing block sold for $1.505 million.
116 Bowman Rd, Hamilton. A 30 hectare grazing block sold for $1.4 million.
Komata Reefs Rd, Paeroa. A 200 hectare grazing block sold for $1 million.
1263 Kaihere Rd, Kaihere. A 17 hectare grazing block sold for $740,000.
Farm sales
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4 Comments
A leetle financial-model riff on this article: production figures ex LIC
Revenue cows/ha 2.8 KgMS/cow 346 KgMS/ha 968.8 $/kgMS gross $5.50 Rev/ha $5,328.40 Costs FWE/KgMS $3.80 FWE/Ha $3,681.44 GP/ha $1,646.96 CV/Ha $33,000 Interest rate 5.50% Interest or opportunity cost/ha $1,815.00 NP/ha -$168.04 Excludes/Ignores: Drawings Capex TaxThat interest rate is extremely low for a business (looks more like a residental house special rate)
Also that GP doesn't include rent, subtract another 4% of total CV from the NP.
for a total LOSS of $ 1488.04
ignoring drawings, capex ... but including tax ;)
As usual for a tough business, the owner lives in the depreciation margin.
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