increase font size
Hilderthorpe dairy farm which recently sold for $8.35 million.
PGG Wrightson says the recent sale of a Lower Waitaki dairy farm for $8.35 million could “re-ignite” the market for dairy property.
Dave Heffernan of PGG Wrightson Real Estate, Oamaru, who marketed the 178ha farm at Hilderthorpe, south of the Waitaki River, said few dairy farms have sold in recent months.
“Although recent transactions have been rare, the sale value of about $47,000 per hectare is close to what this farm would have made two years ago.”
While many vendors seek $50,000 a hectare, few are selling at that price, Heffernan said.
The farm was listed in January and sold in June to a local buyer.
“We also received interest from several other parties, indicating that farms with low cost reliable water, good soils and proven production should achieve values that satisfy realistic vendors,” he said.
The farm produced 250,000kgMS from 580 cows in the 2019-20 season.
The sale did not include plant and equipment but the buyer has bought the herd (in a separate transaction) and a contract to supply Oceania.
Heffernan said because would-be Oceania suppliers do not need to buy shares or join a supply waiting list, the supply contract was a big incentive for the sale.
Oceania has been owned since 2013 by the Chinese dairy giant Yili, currently awaiting regulatory approval for its proposed purchase of Westland Milk Products.
Yili says it has invested $650m in setting up milk powder, infant formula and UHT production lines at the Oceania plant just north of the Waitaki River, and that it is paying suppliers above the industry average.
PGG Wrightson Real Estate North Otago branch manager John Sinnamon said the Hilderthorpe sale was a positive signal to a stalled market.
“Several factors, including Mycoplasma bovis and banks adhering to tighter lending criteria, have increased recent levels of buyer caution. However, this sale shows them more attuned to current market expectations, while vendors are willing to take innovative steps to achieve the best outcome.
“In the current market you have to be more innovative to achieve a sale. For example, vendors might opt to retain a proportion of equity in a farm for a limited term.
“This sale proves that realistic vendors can reach agreement with motivated purchasers, which is necessary for the rural property market to remain active. It also shows purchasers remain interested.”
Buoyed by strong forecasts for milk prices and a renewed demand for dairy assets, the South Island rural real estate market has begun the year with positive momentum, according to Colliers.
PGG Wrightson (PGW) chief executive Stephen Guerin says that while there are positive signals within the market, there are also challenges.
Pleased, but cautious. That’s how PGG Wrightson chief executive Stephen Guerin says he’s feeling about the rural retailer’s latest financial result.
PGG Wrightson has launched a new stock-counting service using drones and Artificial Intelligence (AI), which it says removes all the hassle for farmers, while achieving 99.9% accuracy.
In another sign of improving agribusiness sentiment, two listed companies have lifted their forecast earnings for the year.
The Primary Production Select Committee is calling for submissions on the Valuers Bill currently before Parliament.
Horticulture New Zealand (HortNZ) says that commercial fruit and vegetable growers are getting ahead of freshwater farm plan regulations through its Growing Change project.
Lucidome Bio, a New Zealand agricultural biotech company was recently selected as one of fourteen global finalists to pitch at the Animal Health, Nutrition and Technology Innovation USA event in Boston.
Tractor manufacturer and distributor Case IH has announced a new partnership with Meet the Need, the grassroots, farmer-led charity working to tackle food insecurity across New Zealand one meal at a time.
The DairyNZ Farmers Forum is back with three events - in Waikato, Canterbury and Southland.
To celebrate 25 years of the Hugh Williams Memorial Scholarship, Ravensdown caught up with past recipients to see where their careers have taken them, and what the future holds for the industry.
OPINION: Last week's announcement of Prime Minister’s new Science and Technology Advisory Council hasn’t gone down too well in the…
OPINION: At its recent annual general meeting, Federated Farmers’ Auckland province called for New Zealand to withdraw from the Paris…
