The Weekly Dairy Report: Harvesting of surplus grass starts as farmers look to rebuild feed reserves depleted over the last year

More paddocks are being harvested for silage and sprayed for regrassing, as spring proper kicks in, and cows graze now only on grass.

Irrigators are flowing and more hot days are producing good pasture growth rates and stimulating clover.

Early seed heads are emerging, and some paddocks not properly grazed in the wet, are being topped to tidy, and ensure pasture quality standards are met.

Advisers suggest continuing on with pasture assessments, if the goal of peak milk for as long as possible is to be achieved.

NZ's total milk production lagged behind last year in both August and September due to the wet, and farmers will be looking for warm conditions to drive milk production ahead, in October and November.

Regular N applications are being continued under nutrient budget guidelines to help ryegrass tillering over the summer period.

Fodder beet and summer brassica establishment is in full swing, with specialist planters busy sowing for next year’s winter feed.

All focus is now on mating deadlines, and for many, insemination with easy calving sires on heifers is now complete, and follow up bulls are out.

Mating in the main herd is due to start in the south, as the 36 bulls in NZ’s AI programme drive the majority of the nation’s genetic gain.

Northern farms are now putting out follow up bulls with sires suitable for dairy beef progeny now very important for NZ's beef trade.

Murray Goulburn settles with Saputo for $1.3 billion to buy it’s failed business in Australia, rejecting Fonterra’s offer in the process.

A lower currency has given dairy commodities a lift, with cheese once again reaching yearly Oceania highs, but the auction on the 7th November will be pivotal in showing more market direction for this new season.

Officials are suspicious of imported semen causing the myco plasma bovis outbreak, and bio security rules will be checked in determining how this disease established here.

Two new directors have been selected onto the Fonterra board to help keep the decision makers sharp and visionay as they plan the giant Co-Operatives future ahead.

Dairy prices

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12 Comments

My agent mate tells me there is 75,000 hectares of dairy land for sale in the Waikato, normally at this time of year there is under 15,00 hectares. Belle was right. Also very soft farm market at present, commissions tight.

What was he drinking? If he is right, almost all of his supposed 75,000 ha are not being advertised.

You can check the listings here. There are 80 current Waikato dairy farms for sale, and they total 11,133 ha. Where's the other 64,000 ha being offered? A tall story, I think.

Hi David, it was from the horses mouth.

Andrew, have to agree with David - even stretching Waikato down to Ruapehu there is roughly 12,000ha of dairy land for sale
Might pay to find another horse.
The market seems to be soft as some vendors expectations are huge, the banks are non committal, and with no runs on the board yet we are waiting to see who blinks first - vendors or purchasers.

Same here soft, cannot tell you much more about the farms for sale in the Waikato. Hopefully buyers surface.

There is a huge backlog of farmers that have been trying to get out for years now. Really nice properties. Newish facilities. One of our neighbours just hit the market again. The poor guy has been selling it for nigh on 10 years. I know of one over Waotu way, its a big property, thats been for sale for only 24 months. But they have been advertising hard out most of that time. Great farm. I can think of a dozen farms off the top of my head in our area either actively on the market or was unsold from last year. Which is a lot for around here. I got Bayleys rural sales book ysterdy. Dropped at my back door with a pen. Its phonebook size.

I'm wondering Belle and Wilco if banks are more picky on who/what they lend on. A mate was talking to a banker about a farm >300ha for sale for what would be considered a 50% discount. Banker said to stay well away from it - in their opinion it should never have been converted. It is owned by investors who appear to have bought naively and have now realised just what they have bought in to. With new environmental regulations coming in, banks down our way are definitely factoring in those considerations in to what they will lend on.
I have heard of dairy farms being sold to go back to non dairy. There appears to be a market for 'good farms' at around $37k/ha but some which have issues (typically needing upgrading of effluent systems etc) can be as low as low $20s/ha which is close to what land suitable for conversion was going for not that long ago.

CO - Bank manager says because of change of government expects lending criteria (especially dairying) will have greater focus on environmental issues and potential risks, another focus is on the ability of the business model to cope with greater price volatility than we were used to.
Our region also has a number of conversions that should never have happened, voicing that opinion to bank management has not made me popular. Investors/speculators have stepped in thinking they were buying bargains and are now releasing these farms back on the market at inflated prices, though that is just one man's opinion. They don't appreciate that sale price is only partly impacted by the current payout level and that bank lending criteria has a far larger impact on final sale price for most farms.
We too were warned off a farm purchase recently by bank manager as the lack of success of previous owners made them too nervous to consider supporting. The old adage 90% of drivers think they are above average drivers.
Know of one or two cowsheds shut down and gone back to beef but they were more location buys by financially sound operators.
Believing the beef job has passed its current cycle's peak I guess we will see more beef farms coming onto the market.

"poor guy has been selling it for nigh on 10 years"

What has he been doing?
Most likely lifting the price he wants every year and never selling - sucker

My mate's old-man told me you can sell anything at any time
So long as you leave something on for the next guy

In real estate there is one truism - Price fixes all problems - No matter how isolated the farm, how rundown it is, what the faults are, if the price is right it will sell. We have been involved in a number of farm sales and purchases in the recent past and all have been concluded within a number of months. The only exception might be those farms at the very top of the price range where there are few potential buyers but for all else priced right it will sell. I too know of farms that have been on and off the market for five to ten years which means they are overpriced.
Whether the vendors can sell at a realistic price is a different matter.
Around me one issue holding sales up is retiring farmers struggling to accept the relative value between their "economic' scale farm and the cost of a lifestyle block close to town or a house in the nearest city.

Yes Wilco I am looking at that problem myself. The value of my economic property relative to something smaller closer to town is not proportional. Either I stay put and keep doing the miles to and from, or move and try and find work to add to the kitty. It seems easier to stay put. I just promise myself a new car every 3 years so I dont have to deal with breakdowns or any vehicle issues. For those that wonder at farmers always upgrading their 4wd, the enormous mileages we do coupled with windy gravel roads, its a cost of business melded with keeping ones sanity.

Three years ago we paid $15k per ha

Three months ago the farm next door 269 ha went for $8,000 per hectare - sold in 1 month

5 Kms south a lifestyle block of bush and gully asking $17k per hectare - mountain goat country