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There were 127 fewer farm sales (-33.8%) for the three months ended July than for the same period last year.
According to the Real Estate Institute of New Zealand, there were 249 farm sales in the three months ended July, compared to 331 for the three months ended in June, and 376 farm sales for the three months ended July last year.
The median price per hectare for all farms sold in the three months to July was $27,220 compared to $27,180 recorded for three months ended July 2021 (+0.1%). The median price per hectare decreased 2.9% compared to June 2022.
The REINZ All Farm Price Index decreased 2.4% in the three months to July compared to the three months to June. Compared to the three months ending July last year, the All Farm Price Index increased 13.9%. The index adjusts for differences in farm size, location, and farming type, unlike the median price per hectare, which does not adjust for these factors.
Southland (+8 sales) was the only region to record an increase in the number of farm sales for the three months ended July compared to the same period last year. Northland (-22 sales) and Bay of Plenty and Gisborne/Hawke’s Bay (-18 sales) recorded the biggest decreases in sales.
REINZ rural spokesperson Brian Peacocke says sales statistics for the three-month period indicate a significant reduction in farm sales throughout the country, being 45% down on the same period last year and 29% down on the July period two years ago.
“The combination of the wettest July for many years and the mid-winter temperatures clearly impacted on the enthusiasm within the rural sector to transact, and when the external factors of inflation, rampant cost escalation and increasing interest rates are added to the mix, the outcome was somewhat inevitable,” he said.
“Despite the above, while an easing in the milk price is being signalled, the end of season return looks good and will offset to a degree the negative issues mentioned above.
“Returns from beef and lamb remain strong, with steadily increasing prices for store cattle now reflecting a shortage of supply brought about in part by the strong drought-induced rate of slaughter experienced during the autumn and early winter.
“Current strong returns for horticulture and vegetable products are good news for producers, albeit not necessarily sufficient to offset the shortage and cost of labour being experienced throughout the rural sector. Regrettably, such high prices are not necessarily good news for the broad range of consumers.”
Peacocke says trading banks confirm enthusiasm for future business, but that position appears at times to conflict with conditions relating to the uptake of funds by those seeking financial accommodation.
“Having canvassed opinion within the rural sector to quite an extent, it is clear caution prevails within the industry, and there is an underlying and increasing degree of resentment regarding the mix of economic constraints and environmental impositions emanating from what would appear to be a less than sympathetic central authority.”
For the three months ended July this year:
Dairy: The median sales price per hectare for dairy farms was $38,880 (22 properties), compared to $36,755 (46 properties) for the three months ended June. The median dairy farm size for the three months was 94 hectares. On a price per kilo of milk solids basis the median sales price was $36.94 per kg of milk solids, compared to $35.94 per kg of milk solids for the three months ended June (+2.8%).
Finishing: The median sale price per hectare for finishing farms was $35,540 (99 properties), compared to $38,230 (117 properties) for the three months ended June, and $33,445 (125 properties) for the three months ended July 2021. The median price per hectare for finishing farms has increased 6.3% over the past 12 months.
Grazing: The median sales price per hectare for grazing farms was $13,530 (73 properties), compared to $13,290 (88 properties) for the three months ended June and $11,905 (116 properties) for the three months ended July 2021. The median price per hectare for grazing farms has increased 13.6% over the past 12 months. The median grazing farm size for the three months ended July 2022 was 210 hectares.
Horticulture: The median sales price per hectare for horticulture farms was $435,420 (21 properties), compared to $526,585 (26 properties) for the three months ended June 2022 and $247,250 (47 properties) for the three months ended July 2021. The median price per hectare for horticulture farms has increased 76.1% over the past 12 months. The median horticulture farm size for the three months ended July 2022 was seven hectares.
