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Dairy farmers culling stock, reviewing surplus assets with farm prices down 12.1% over past year - REINZ

Rural News
Dairy farmers culling stock, reviewing surplus assets with farm prices down 12.1% over past year - REINZ

Dairy farm prices have fallen by 12.1% over the last 12 months as lower milk prices take their toll, according to the Real Estate Institute of NZ.

The REINZ Dairy Farm Price Index, which adjusts selling prices to allow for differences in farm size and location, was down 13% in the three months to July compared to the three months to June, and down 12.1% compared to a year ago.

"The recent Fonterra dairy payout announcement confirmed widespread expectations within a marketplace anticipating a downturn in the current season. The key issue for many is the time prices are likely to remain at current levels," REINZ rural spokesman Brian Peacocke said.

"Across the board, culling of lower performing animals is evident, and the retention of surplus assets is under review," he said.

"By contrast the news is brighter for other sectors with record prices being paid for beef, good prospects for lamb, improving prices for wool and an improving market in the kiwifruit and pip fruit sectors," Peacocke said.

The REINZ All Farm Price Index, which tracks movements in the prices of all farm types and adjusts for variations in size and location, was down 2.9% in the three months to July compared to the three months to June, but was up 3.9% compared to a year earlier.

The lifestyle market remained buoyant, with sales of lifestyle blocks up 36.4% in the three months to July compared to a year earlier.

The national median price for lifestyle blocks was $555,000 in the three months to July compared to $525,000 in the same period last year.

In Auckland the median price of lifestyle blocks was $947,500 in the three months to July compared to $897,500 in the same period last year.

Farm sales

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New Zealand
Source: REINZ
Arable
Source: REINZ
Dairy
Source: REINZ
Finishing
Source: REINZ
Forestry
Source: REINZ
Grazing
Source: REINZ
Horticulture
Source: REINZ

No chart with that title exists.

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8 Comments

Why hasn't interest.co.nz reported that russia has lifted the ban on nz dairy?

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Same reason they aren't reporting that John Key is spending the Electric Asset sales money on Road projects in China, not NZ.

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Last I heard bout a month ago they were still waiting for one Russian signature. Is it a done deal now Doug? I'm out of the loop at the moment. If so, that is good news and of course MSM are interested in good news. ;-)

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I don't think Russia going to be a 'golden panacea', it's started giving low interest loans to dairy farms to increase production and looking in the medium term to be a dairy exporter. They were looking in the USA, for farmers willing to go to Russia to be involved in the beef and dairy industry. But in a storm it's better than nothing, does it affect how we vote at the UN?
Also someone here mentioned that NZ technology was very much being sort after in Russia at present.
http://www.energyandcapital.com/articles/russia-losing-on-more-than-oil…

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I'd agree with your assessment. That's very much bear (and bear basher) thinking.
No more will Russia be told whether it can or cannot have milk on other countries terms. They have good farmers who work hard and produce better than others in the world given the support. So they will make it happen (setting the farmers up, support not so much their strong point). And if they can setup their own supply nothing will stop them stepping on to the worlds markets with Russian products.

Which is actually a good thing for NZ family farmers. Not good for large corporates.
With the exception of foreign buyers NZ has little competition for land use - so if NZ government wakes up it's act and stops selling off the place; land, farmings biggest expense (next is wages) will not become too expensive - and since unlike more industrialised systems we have low cost systems, we can still make margin in those prices. Landcorp are proving that there just isn't the margin available for the high-expense high-volume production model in a commodity market and that attempting to get the volumes required simply floods the market instead.

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Today's farm and lifestyle auctions we are conducting in Cambridge may well signal any market change.

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Buy-up time for the larger corporates, perhaps....

And f'n yez pull that there graph thingo so that it shows 2009-2015, I'd eyeball the average at $32,500/ha.

Reverting to long-term mean.

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