The REINZ Dairy Farm Price Index has dropped 21% in 12 months

The REINZ Dairy Farm Price Index has dropped 21% in 12 months

Dairy farm prices have declined by 21% from where they were a year ago, according to the latest figures from the Real Estate Institute of New Zealand.

The REINZ Dairy Farm Price Index, which adjusts for differences in farm size and location, was down 20.9% in the three months to February compared with the three months to February 2015.

Most of the decline appears to have occurred in February itself, with the Index down 14.3% in the three months to February compared with the three months to January.

The median selling price per hectare of all dairy farms sold in the three months to February was $36,687 compared with $45,105 in the three months to February 2015.

The number of dairy farm sales has also dropped steadily over the last two years, falling from 123 in the three months to February 2014 to 97 in the three months to February 2015, to 76 in the three months to February this year.

REINZ rural spokesman Brian Peacocke said favourable climatic conditions over much of the country had seen a continuation of good returns for beef and horticultural properties, but the outlook was being dominated by a "gathering of clouds and difficult conditions" for dairying.

The more robust outlook for non-dairy farms was reflected in the REINZ All Farms Price Index, which rose 0.6% in the three months to February compared with the three months to January and was up 6.2% compared with the three months to February 2015.

There was a steady level of sales for grazing and horticultural properties but an easing in activity for dairy and finishing properties, Peacocke said.

There were also indications that some dairy farmers in strong financial positions were holding back from making purchases in anticipation of lower prices.

Grazing properties accounted for 45.6% of all farm sales in the three months to February, followed by dairy farms 16%, finishing properties 15.6% and horticultural properties 11.4%.

Farm sales

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We welcome your help to improve our coverage of this issue. Any examples or experiences to relate? Any links to other news, data or research to shed more light on this? Any insight or views on what might happen next or what should happen next? Any errors to correct?

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24 Comments

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The choice of picture for this article couldn't have been better. Great selection Greg. Sums things up without needing to read the article.

Well, the Norwegian Blue prefers kipping (13) on its back.

She is sleeping

Well then there's your problem Henry...this is no time for sleeping.......I didn't get where I am today by sleeping !
Norwegian Blue or not , if you hadn't nailed it to the perch it would be pushing up the daisies

Christov, can I say CJ....

https://www.youtube.com/watch?v=GYoFCwIFB0M

can I lead the South American investigation....

Loved it Henry....its been a while !!! thank you.......Got a Friday Yay later on interpreting Corporate spin.

Ah, IO -that photo shows beef cattle not dairy cattle. Would help if the media used photos of dairy cattle in dairy articles instead of beef. ;-)

be interesting to see if the banks are factoring this information into their stress tests

The 'Great Dairy Purge' of 2016/17 has begun.

So they've only got another 19% to fall then?
Should be there by May then back up again right?

Dairy land prices could fall 40 per cent in worst case scenario - Reserve Bank

Here we go again stating median prices and falsely deducting that it is some sort of measure of price. All that those figures show is that there were some cheaper farms sold over that period than the previous year. So don't get to excited.

INDEX is quoted not median

QUOTE "The median selling price per hectare"

Zebeck , correct me if I am wrong, but if the REINZ is using a "median price per hectare" and taken farm size and location into account they have already factored in both cheap and expensive farms into their result.

If farms that are less productive and/or in a lower per ha price range are selling and higher end farms are not selling then the figures in a median price range get distorted. This is a recognized problem in quoting real estate sale comparisons. REINZ also have the comparison to R.V figures which give a better idea.

Hows this work?
https://reinz.co.nz/rural-property-data#

http://i.stuff.co.nz/business/farming/78006815/dairy-farm-prices-and-sal...

The median price per hectare for dairy farms has tumbled about $11,000 since a year ago, and there were no dairy farms sold at all in Canterbury or on the West Coast in the last three months.

I presume they have taken the above into account when they considered size and location Zeebeck.

If the Pinny farms that were recently sold and a few other Northland farms sold during this period then you would expect it to impact the national Median as those Northland farms were around $18-$19k / ha. ANZ usually has a good rundown of regional sales results in their rural report which gives a good gauge on what is happening in specific locations.

Don't you go peddling those doomsday senario's Aj. Get with the programme...its called volatility!

http://www.stuff.co.nz/business/farming/agribusiness/77995989/no-dairy-c...

Another 20% coming as farmers equity goes up in smoke, this equates to years and years of bad payouts

As I was saying...when they(the Banks) were lending if it wasn't on a sound business plan then what ?

It's pouring down on the farm and this lousy promo bank umbrella just isn't cutting it.

Heard QV being interviewed on National Radio this morning. Their figures align with the REINZ's figures.
Big reduction in sales, the drop is around 20 per cent and he said dairy farm prices will continue to fall. The regions are in big trouble GDP wise.

Who in there right mind would buy a farm now , banks need to seriously get to the party, there up for a big hit too