Tougher times down on the farm

Farm prices appear to be plateauing, providing more evidence of a retraction in the farming sector, the BNZ says.

But BNZ chief economist Tony Alexander says there will be no hard downturn.

The BNZ's weekly overview said the total of 147 farms sold in February was down 38 per cent from a year earlier.

That meant the number of sales in the three months to February was down 30 per cent on a year ago and was 25 per cent of the average for the period in the past six years.

For the year to February, sales were down 3 per cent. The average sale price in the three months to February was $1.1 million, up on the $947,000 three months earlier but unchanged from a year ago.

The BNZ commentary comes after a Meat and Wool New Zealand report this week which said lower returns would push the average profit for cattle and sheep farmers to a seven-year low.

Alexander said yesterday that the apparent plateauing in prices and dipping turnover were further signs of the consolidation going on in the rural sector as it faced tougher times. Tractor registrations had also been down, by about 20 per cent on a year earlier in the three months to February.

But Alexander said the bank remained positive about farming, particularly with "world commodity prices still looking very good in most instances".