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Farm prices and sales volumes have collapsed in the last two years as the withdrawal of easy bank lending has dried up farmers’ appetites for capital gains, fresh figures show.

The slump in the number of transactions is expected to ripple out through the rural and provincial economies, given the surge in lending and activity through 2006 to 2008 helped drive spending on coastal and provincial residential property.

The national median farm sale price was NZ$1.045 million in the three months to February, down 40% from the NZ$1.75 million seen in the three months to February 2008, Real Estate Institute of New Zealand figures show.

There were 11 dairy farm sales in February and 34 in the three months to February, which is down 78% from the 158 seen in the three months to February 2008, which was seen as the peak of the dairy boom. A sharp drop in the forecast Fonterra payout and a much more rigorous approach to farm lending by banks has triggered the collapse.

REINZ President Peter McDonald said there were “still reasonable levels of inquiries for all types of farms, but they do not seem to be resulting in completed transactions.”

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Here are a selection of current stories from agridata.co.nz

“Super grass” aims to boost milk production

Researchers planning on launching a genetically-engineered “super-grass” by 2013 claim cows grazing on it will produce up to 20 percent more milk.

The GE ryegrass – being developed in Australia for NZ seed company PGG Wrightson – has potential to make a huge difference to agriculture, according to the chief executive of the Australia’s Molecular Plant Breeding Cooperative Research Centre (MPBCRC), Glenn Tong.

Existing dairy farming pasture-grasses are mainly perennial ryegrass and tall fescue, but the perennial ryegrass grows best in temperate areas that are becoming warmer with climate change reports Stuff. Mr Tong told the ABC that the technology works to increase the carbohydrates or energy molecules in the grass, and the fodder will also be more digestible than existing ryegrass so the sheep and cows can access those energy molecules more easily.

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interest.co.nz has a sister on-line publication agridata.co.nz which follows rural issues of interest to working farmers.

We are working to draw the two services closer together, and this project will be launched later in the year.

In the meantime, here is Agridata’s latest weekly review of farm-gate prices and price influencers.

Deer
The velvet market is in an awkward dilemma with Chinese demand unsatisfied for regrowth, spiker and manufacturing grades, but they show little interest in NZ’s heavier sticks.

To survive farmers have lifted stick weights substantially, and now a large portion of production is in the A and super grades.

Korea is the main market for these, and with recent demand flat, producers are having to be patient as the product is steadily sold, in a bid to maintain price, and build long term business.

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The average whole milk powder price achieved in Fonterra’s monthly online auction overnight was US$3,281 a tonne, up 0.8% or US$25 a tonne from the previous month. It is down 25% from the peak in July 2008 and up 79% from the low in July 2009.

This is unlikely to change the outlook for the Fonterra’s milk price forecast for the current season of NZ$5.70/kg milk solids or for the likely dividend of 20-30c/kg.

Here is Fonterra’s full statement below.
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Commodity prices rose 7.9% to near record highs in February as most commodity prices rose in US dollar terms and the New Zealand dollar softened over the month, the ANZ Commodity Price Index found.

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Here is the full release from ANZ:
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Here are a selection of current stories from agridata.co.nz

New TB test developed for cattle

Scientists in the US have developed an antibody-based test for bovine tuberculosis (bTb) reports The Beef Site. The new multiplex antibody test is able to detect antibody activity to 25 antigens at one time, something that was previously not possible. The new test may one day replace the current skin and gamma interferon tissue culture tests.

Currently there is no effective treatment for bTb, so early diagnosis is critical. This new test can detect the disease faster and with great accuracy. Dr William Davis, professor in Washington State University’s Veterinary Microbiology and Pathology department said: “Our test can provide results in a matter of hours rather than days with current methods. It also has increased specificity and is highly sensitive, so there are fewer false positives.”

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