Average dairy farm worth record $3.2 million

Average dairy farm prices have set a record, rising by nearly $1 million in one month.

Real Estate Institute figures out yesterday showed dairy farm prices rose from a median $2.3 million in November to $3.2 million last month.

The institute found dairy farms remained more expensive than any rural properties, ahead of grazing farms, which sold last month for a median $890,000 and finishing properties, which sold for a median $1.8 million.

Dairy farmers' expectations have been higher than those of farmers in other rural sectors lately. When questioned by the Rabobank ACNielsen Rural Confidence survey in October, 76 per cent of dairy farmers believed the economy would stay the same or improve.

However, October's survey took place just after dairy co-operative Fonterra announced a 15c per kg increase in its milk solids payout.

The same survey carried out last month found that almost half of dairy farmers expected the economy to worsen.

Fonterra's half-year results are due out today and a revision of its growth forecasts is expected from the organisation that accounts for about 40 per cent of the international trade in dairy products.

Institute figures showed national farm prices were at $1.2 million, up from the November median of $1.1 million

Farmers traded 233 properties last month, compared with 236 properties in November and 326 in December 2004.

Institute vice-president Murray Cleland attributed the lower turnover to a desperate shortage of listings due to a sustained period of good returns and favourable climatic conditions for the rural sector.

Costliest

Most expensive farm regions - median prices:
* Waikato $2,147,188.
* Hawkes Bay $2,050,000.
* Nelson/Marlborough $2,000,000.
* Taranaki $1,940,000.

Cheapest

Cheapest farm regions - median prices:
* Canterbury $880,000.
* Gisborne $900,000.
* Auckland $933,000.