There is positivity in the Southland dairy farm sales market.
Director for rural & agribusiness valuation at Colliers Luke van den Broek said with Fonterra lifting the 2024/25 season forecast farmgate milk price midpoint by 50c to $8.50 per kgMS, he expects positive sentiment to influence dairy farm sales.
“Improved market sentiment is likely to result in increased market activity.”
The newest Colliers Southland Dairy Property Market Report listed 26 confirmed transactions in Southland and West Otago in the 2022/23 season with the total volume of these transactions being $225,574,500, 28.7% lower than the 2021/22 season.
The volume of transactions slowed through the 2023/24 season, although sale prices appear to be holding at levels comparable with the end of the 2022/23 dairy season.
By the end of July 2024 there were 21 confirmed transactions in Southland and West Otago during the dairy season, with 11 reaching agreement in 2024.
The prevalent dairy property market in Southland has been dominated by land selling between $28,000/ha and $38,000/ha, sized commonly between 150 and 250 hectares.
The average sale price at the end of July for 2023/24 was $5,911,162 or $34,435/ha, with an average farm size of 181ha.
Comparatively, in 2022/23 the average sale price was $8,675,942 or $32,993/ha with an average land area of 277ha.
“It’s been quite remarkable how the Southland market has held up, because there has been pressure on the dairy sector. Southland still punches above its weight and holds very strongly in the dairy sector. That’s what the numbers are reflecting, even with the negative sentiment around payout at the start of the 2023/24 dairy season, the market still kept on going,” Van den Broek said.
“With improved sentiment and dairy payout there is potential for a good level of market activity.”
For dairy support properties, those with good wintering capabilities that include well-drained soils and are located in an area within an easy commute tend to attract a wider buyer pool.
Dairy support properties with partial or full winter grazing capability have been transacting for between $30,000/ha and $40,000/ha in 2023/24 season.
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