Dairy farm median prices drop 8.4 pct in June year - REINZ

Farm prices fell in the June quarter, according to REINZ data.

The median price per hectare for New Zealand dairy farms has fallen by 8.4 per cent over the past 12 months, but it's too early to tell if the weakness the result of the spread of the cattle disease, Mycoplasma bovis, a spokesman for REINZ said.

For the three months ended June 2018, the median sales price per hectare for dairy farms was $31,881 (57 properties), compared to $35,901 for the three months ended May 2018 (74 properties) and $34,789 (59 properties) for the three months ended June 2017, REINZ said.

The REINZ Dairy Farm Price Index fell by 3.4 per cent in the three months to June 2018 compared to the three months to May.

Compared to June 2017, the REINZ Dairy Farm Price Index - which adjusts for differences in farm size and location - fell by 11.5 per cent.

REINZ rural spokesman Brian Peacocke said lower volumes were the norm during the early winter period of June, but that sales figures for the most recent three month period indicated an "encouraging degree of resilience", particularly for the drystock sector.

There had been strong performances in the finishing and grazing categories, underpinned by steadiness in the horticulture industry.

"Rural New Zealand has embarked upon the winter in good shape, with solid confidence after a very good autumn, forecasts of a good dairy payout and ongoing optimism for export returns from beef, lamb and horticulture," Peacocke said in a statement.

Peacocke said the "pervading presence" of the cattle disease Mycoplasma bovis remained the dominant biosecurity issue, with outbreaks continuing to have a devastating impact on those farming and on rural businesses.

"Early spring 2018, when dairy and beef animals are likely to be under maximum stress, is anticipated to be the real test for the government and industry-backed eradication programme, a period nervously awaited by the farming sector and the wide variety of rural industries providing back-up to the primary industries," Peacocke said.

Peacocke said it was too early to attribute the farm price weakness to the disease.

"We are getting fluctuations the whole time, so I guess when you have less volume the price drops are going to be more pronounced," he said.

"If (price weakness) flowed through into the spring and there were more properties being offered, then you would start to ask the reason why," he said.

Peacocke said he expected finishing farms and grazing properties to become more sought-after as dairy farmers looked to make their farms more self-contained to offset the effects of the highly contagious M. bovis.

Data for the broader farm sector showed there were 32 fewer farm sales for the three months ended June 2018 than for the three months ended June 2017.

The median price per hectare for all farms sold in the three months to June 2018 was $21,745 compared to $25,993 recorded for three months ended June 2017 (a fall of 16.3 per cent).

The REINZ All Farm Price Index fell 4.4 per cent in the three months to June 2018 compared to the three months to May 2018.

But compared to June 2017, the REINZ All Farm Price Index rose 3.7 per cent.

Horticulture farms saw a median price per hectare jump 75.6 percent on the year to $279,543.

Northland, in particular, saw increased demand for land suitable for horticulture, stimulated in part by Zespri releasing additional licences for gold kiwifruit and ongoing widespread demand on land suitable for avocados and market gardening, REINZ said.