Dairy and grazing farm sales holding up but sales of horticultural, finishing and arable properties are down says REINZ

Farm sales and prices were largely flat in January although dairy farm prices are on the rise, according to the Real Estate Institute of New Zealand.

The REINZ said 521 farms of all types were sold throughout the country in the three months to January, compared to 499 for the three months to December and 532 for the three months to January 2016.

The REINZ All Farm Price Index, which adjusts for differences in farm size, location and type, was up 1.6% for sales in the three months to January compared to the three months to December, and up 4.1% compared to a year earlier.

Much of that increase was likely driven by the improved fortunes of the dairy industry, with the median price per hectare of dairy farms up 13% over the last 12 months.

The REINZ Dairy Farm Price Index, which also adjusts for differences in dairy farm size and location, rose 5.2% in the three months to January compared to the three months to December, and was up 8.6% compared to the three months to January last year.

Sales volumes in the dairy and grazing categories have been reasonably consistent," REINZ rural spokesman Brian Peacocke said.

"However volumes in other categories, particularly finishing, arable and horticulture, have experienced distinct reductions during the month of January.

"Current concerns in the rural sector centre on volatility of income, compliance issues and drought conditions in northern and eastern districts of both the North and South Islands.

"Caution and uncertainty continue to be ongoing components of the marketplace.

"This is causing some frustration with transactions taking longer to come together," he said.

Here is the REINZ's full rural report for January:

PDF iconREINZ Rural Press Release - January 2017.pdf

Farm sales

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15 Comments

Banks stop lending to farming, in fact went into reverse.
http://www.rbnz.govt.nz/statistics/s7

What effect will this have affecting local Dunedin Farmers...AJ?.

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=1180...

Personally I think all of NZ should avoid Cadbury like the plague, when they want to sell us stuff from Aussie.

In fact, Dairy Farmers might like to contribute to reopening the Factory and keep the staff...and make a superior product and get their "Own"...back.?

Or is that just wishful thinking?.

Hi Ergo,

Cadbury is part of the Mondelez International group, so no Kiwi ownership. They did mention that like the rest of us, costs in NZ are out of control " Cadbury, said it was no longer able to absorb the increasing production costs from manufacturing in Dunedin and would be closing in 2018."
https://en.wikipedia.org/wiki/Mondelez_International

We still have the hurdle of the EU dairy intervention stocks, just had the 4th failure at auction for %5 of stocks.
http://edairynews.com/en/eu-milk-powder-stocks-fail-to-sell-again-as-com...
My accountant tells me the banks have started showing true colours.

The Cadburys factory is reminiscent of the Dodge or Packard factories in Detroit but indeed the farmers could form a cooperative to freerange chickens...or pigs...in the building with subsidies from the Dunedin City Council.

I thank you for your comments. As a Co-operative it might work...but not if the banks and Fonterror and the staff...do not come to the party.

Hi Aj, there does seem to be lots of rural property hitting the market right now. Many dairy farms, bits and bobs cut off farms. Runoffs. My bank dude was in denial....nah all is hunky dory...I thought it was spin.

More interesting times coming? The EU is having no lock selling down its intervention stocks, look at the prices.
>>
Still no intervention stock shifted and PSA closed
In the latest (4th) tender process for SMP intervention stock, nothing was sold again. Just shy of 1.8k tonnes were applied for, ranging from €1,850/tonne to €1,550.
13 February 2017

>>

Then there has been a big cow kill in the EU, up over %10 on last year, hard to get any news on it, this is the best I can do.
>>

European cow slaughter for
January through November is up 10.7% from 2015. Europe reports dairy and beef cow slaughter together, so an increase in beef cow slaughter could skew these numbers upward, but the bulk of the increase is likely from dairy. Year-to-date slaughter was particularly strong in Ireland (+35%) and the Netherlands (+27%). After the rapid expansion in the dairy herd in 2014 and 2015, this contraction is a healthy adjustment that will likely stave off a quick return to the immense volumes of milk the market had to absorb in the first half of 2016. At the same time, financial troubles in Oceania and South America are likely to restrict expansion in those regions, leaving greater opportunity for U.S. dairy exports.
All told, U.S. dairy product exports were 3% larger in 2016 than 2015, thanks to a 19% surge in fourth quarter shippments

I wouldnt want to pick what comes next. Beef is holding up well still. Lamb is better than predicted. (Still lousy some would say). And the north has rain now. How bout the east?

40 mls last night, so looking good. Been dry all the way to the mountains.

Xlnt. Heaps at home apparently.

Belle, I got this in an email from Alliance last night,

Cattle
"Volatility has emerged in some US bull and cow manufacturing lines. US domestic prices are under severe pressure. "

They went on to say it now depends on China what the market will do, but with a %10 increase in EU beef kill, Brazil in the market Argentina back after the worlds elite like Soros got the land there for nicks, I don't see record prices for beef returning.
Then again, where has the free market gone? Today there are lot of governments pulling levers to et the desired results. I think we are entering a highly competitive environment.

>>
Argentina's rising grains production strands vessels in river traffic
12:30 AM - ROSARIO, Argentina: When a boat carrying soy oil destined for India ran aground on the Parana River near Buenos Aires in late January, ships loaded with most of Argentina's grains exports were blocked for hours. It was the latest accident on one of the world's great food highways, which is straining to carry rising volumes of Argentine agricultural products embarking on the first leg of the journey from the fields of the Pampas to the feeding troughs of cattle, pigs and chickens worldwide. Increasing congestion on the Parana, which carries 80 percent of Argentina's grains exports, could hamper President Mauricio Macri's efforts to expand farm output and pull the country out of recession. Macri wants Argentina to grow 25 percent more grains to boost rural income and has cut export taxes to attract more investment in the sector.

http://www.world-grain.com/news/news%20home/LexisNexisArticle.aspx?artic...

Spanish beef now selling cheaper in Indonesia than Indian buffalo meat - blocking Oz live exports and no doubt NZ beef. In 2010 Indo was our second largest beef market.

The increased beef kill in the EU must be weighing on markets, funny how it hangs on like a roadrunner clip.
>>
US beef production in October and the first two weeks of November has averaged close to 8% above last year and about 6% above five-year averages. Forecasts indicate fourth quarter production for 2016 will finish up nearly 6% on last year.

Industry analysts suggest that one of the drivers of the larger-than-expected production has been that-herd rebuilding incentives have been reduced as the value of cattle has declined through the year. Heifer and beef cow slaughter since July have respectively averaged 13% and 21% above last year. While no-one is talking liquidation yet, the increase in female cattle slaughter signals that farmers have significantly slowed the rate of expansion.

Also well documented is the downwards pressure the increasing production will have on US domestic beef prices and, in turn, imported prices. While there will still be demand for imported product as a component of the meat patty formulation, unless imported product is priced right, end-users will use domestic product as a substitute.

On top of the increasing supply, the US beef market is also struggling with weak demand. Cheaper competing proteins continue to compete with grinding beef.
https://agrihq.co.nz/topic/world/view/female-cattle-kill-drives-us-beef-...