DESPITE a drop in milk payouts to New Zealand dairy farmers, farm sales and prices remained strong last month, with one South Island Merino property recently fetching NZ$23.5 million.

REINZ National Councillor Peter McDonald said although global dairy giant Fonterra had announced that it would reduce its payouts it appeared to have had little immediate impact on last month’s record dairy farm prices.

The median price for New Zealand dairy farms sold in the three months to September was NZ$4.5 million, slightly down from NZ$4.65 million in the three months to August, but more than double the NZ$2.06 million median price in the corresponding quarter in 2006.

REINZ said 55 dairy farms changed hands in the three months to September, compared with 67 to August.

But it wasn’t just dairy farms that were in demand, REINZ said a South Island high-country Merino farm fetched an impressive NZ$23.5 million.

Mr McDonald said it showed people were still interested in buying farms if they found "what they are looking for." He said it was interest from genuine farmers as opposed to investors.

"Dairy farmers are versatile and adaptable," Mr McDonald said.

"In the same way as they weather climatic challenges such as droughts and floods, they adapt to financial ups and downs. Despite the lower milk solids payout announced by Fonterra, there is still confidence in the sector and it needs to be remembered the reduced payout announced is still considerably higher than it was a couple of years ago.

"Early season sales are indicating similar levels to last year.

"No doubt there will be an adjustment, but it’s too early to tell where the new levels will be. In the meantime, we continue to receive lots of enquiries.”

The total number of all farms sold for the three months to September was considerably down on the three months to August, from 516 to 430 and compared with same period of sales in September 2007 of 557.

However, the median price for those farms sold at NZ$1,672,500 is on a par with August’s figure of NZ$1,742,500 and well up on the corresponding period last year of NZ$1,320,000.

The lifestyle farm market continues to hold well and has been reasonably active, he said.

For the three months to September, 1071 lifestyle farms were sold compared with 1050 in the three months to August, with a median value of NZ$435,000 compared with NZ$450,000 to August.

In other farming categories, finishing farms remained steady on median sales of NZ$1,950,000 on a par with the corresponding period last year which had median sales at NZ$1,974,174. However, the number of sales was down in the sector from 120 in September last year to 57 this year.

Grazing farm prices were also firm with a median price of NZ$1,478,893 on 225 sales for the three months to September compared with NZ$1,123,762 for 227 sales to August.

  • New Zealand Rural Regional Highlights – September 2008 (Source: REINZ)

Northland
The median farm price in Northland dipped to $1,077,500 in September, from $1,152,500 in August (September 2007: NZ$875,000). 30 farms sold (August 2008: 32; September 2007:39). The 30 farms sold consisted of 17 grazing, six horticulture, four dairy, two finishing and one arable). The median price for a lifestyle block decreased to NZ$375,000 in September, from NZ$380,000 in August (September 2007: NZ$317,500). 90 lifestyle blocks sold during the month (August 2008: 105; September 2007: 136).

Auckland
The median farm price in Auckland dropped to $850,000 in September (August 2008: NZ$1,200,000; September 2007: NZ$1,580,000). 16 farms (12 grazing, three horticulture and one dairy) sold (August 2008: 21; September 2007: 31).

The number of lifestyle blocks sold was steady at 128 in September. (August 2008: 128; September 2007: 302). The median price reached NZ$763,750 in September, up from NZ$750,000 in August (September 2007: NZ$750,000).

Waikato
42 farms (31 grazing, eight dairy, two arable and one finishing) sold in September, down from the 52 sold in August (September 2007: 46). The median price was up at NZ$2,540,000 from NZ$2,050,000 in August (September 2007: NZ$1,285,000).

122 lifestyle blocks sold in September, up on the 119 sold in August. The median price dipped to NZ$457,250 from NZ$485,000 in August. In September 2007, 228 lifestyle blocks sold with a median price of NZ$435,000.

Bay of Plenty
The median price for a farm eased to NZ$1,312,500 in September (August 2008: NZ$1,500,000; September 2007: NZ$935,000). 30 farms (15 horticulture, ten grazing, three dairy and two forestry) sold in September, up on the 26 sold in August (September 2007:32).

55 lifestyle blocks sold in September (August 2008:69; September 2007:128). The median price rose to NZ$630,000 from August’s NZ$540,000. (September 2007: NZ$512,500).

Gisborne
Two farms, one grazing and one horticulture, sold in September (August 2008: three; September 2007: ten). The median price dropped to $983,375 in September, from NZ$2,525,000 in August (September 2007: NZ$1,625,000).

Lifestyle block sales increased with 18 sold (August 2008: 14; September 2007:15). The median price eased to NZ$467,500 from NZ$475,000 in August (September 2007: NZ$460,000).

Hawkes Bay
The median farm price eased up slightly to NZ$1,306,000 in September, from NZ$1,162,000 in August (September 2007: NZ$1,300,000). 16 farms sold (August 2008:17; September 2007: 20) consisting of 13 grazing, and three horticulture.

48 lifestyle blocks sold in September, down from on the 49 sold in August. The median price slipped to NZ$420,000 from NZ$430,000 in August. In September 2007, 54 lifestyle blocks sold with a median sales price of NZ$442,500.

Taranaki
The median farm price in Taranaki dropped to NZ$1,160,000 in September, from NZ$1,532.500 in August (September 2007: NZ$1,476,039). 23 farms (14 grazing, four forestry, four dairy and one special) sold in September up on the 20 sold in August (September 2007:16).

42 lifestyle blocks sold in September (August 2008:45; September 2007: 60). The median price remained steady at NZ$410,000. In September (August 2008: NZ$410,000; September 2007: NZ$362,500).

Manawatu/Wanganui
42 farms (31 grazing, six finishing, three dairy and two arable) sold in September (August 2008: 55; September 2007: 45). The median price was down at $1,410,000 from $1,860,000 in August (September 2007: $1,136,000).

The median price for a lifestyle block fell to $327,000 in September (August 2008: NZ$345,000; September 2007: NZ$292,000). In total 107 lifestyle blocks sold, up on the 95 sold in August (September 2007: 123).

Wellington
The median price for a Wellington farm dipped to NZ$2,475,000 in September, down from NZ$3,000,000 in August (September 2007: NZ$1,410,000). Eight farms, all grazing, sold in September, up one from the seven sold in August (September 2007: seven).

51 lifestyle blocks sold in September (August 2008: 55; September 2007: 104). The median price rose to NZ$370,000 from $340,000 in August (September 2007: $400,000).

Nelson/Marlborough
The median farm price dropped to $971,500 in September, from $1,300,000 in August (September 2007: NZ$815,000). In total, 18 farms (six grazing, three each dairy, forestry and horticulture, two special and one arable) sold, down on the 21 sold in August, and down on the 29 sold in September 2007.

59 lifestyle blocks sold in September, an increase on the 55 sold in August 2008. (September 2007: 81). The median price fell to NZ$437,000 from NZ$470,000 in August (September 2007: NZ$450,000).

West Coast
12 farms (nine dairy and one each finishing, grazing and horticulture) sold in September, down on the 16 farms sold in August (September 2007: 9). The median price was steady at NZ$2,526,725 (August 2008: 2,526,725; September 2007: NZ$1,900,000).

The median price for a lifestyle block fell to $150,000 in September, from NZ$237,500 in August (September 2007: NZ$135,000). 21 lifestyle blocks sold in September, up on the 16 sold in August (September 2007: 13).

Canterbury
79 farms (31 grazing, 16 special, 15 arable, eight finishing, seven dairy and one each Sth Island HC Merino and forestry) sold in September, down on the 100 sold in August (September 2007: 100). The median price rose to NZ$1,800,000 from $1,780,750 in August and NZ$1,550,000 in September last year.

199 lifestyle blocks sold, compared with 179 sold in August. The median price decreased to NZ$450,000 from NZ$465,000 in August. In September 2007, 256 lifestyle blocks sold with a median price of NZ$362,500.

Otago
The median farm price reached NZ$2,225-,000 in September, up from NZ$1,800,000 in August (September 2007: NZ$1,100,000). 40 farms sold (August 2008: 55; September 2007: 64). The farms sold consisted of 18 finishing, 11 grazing, four each special and dairy, two horticulture and one arable. 63 lifestyle blocks sold in August (August 2008: 56; September 2007: 74). The median price fell to NZ$360,000 from NZ$446,000 in August and NZ$452,500 in September 2007.

Southland
72 farms (39 grazing, 17 finishing, nine dairy, five special and one each arable and forestry) sold in September, down on the 91 sold in August 2008 (September 2007: 109). The median price rose to NZ$2,200,000 in September from NZ$1,950,000 in August (September 2007: NZ$1,800,000).

68 lifestyle blocks sold in September, an increase on the 65 sold in August. The median price also increased to NZ$313,000 from $305,000 in August. In September 2007, 71 lifestyle blocks sold with a median price of NZ$240,000.