Fewer farms were sold in the three months through July as difficult winter conditions dented activity, although prices lifted due to improved farmer confidence, the Real Estate Institute said.
Across the country, 392 farms were sold in the three months ended July, down from 459 farm sales in the three months to June, and 468 farm sales for the same period a year earlier, REINZ said. The median price per hectare increased to $27,158 in the latest period, up 4.5% from the three months to June, and up 2.5% from the same period a year earlier.
New Zealand farmer confidence has jumped to record levels this year, buoyed by improved commodity prices, according to the latest Rabobank quarterly survey.
Farmers across all agricultural sectors were more positive about the outlook for the agricultural economy, with 71% citing improved commodity prices as a key reason for increased optimism. This was particularly the case for dairy farmers, 77% of whom cited improved commodity prices, and sheep and beef producers, at 66%.
However, land sales activity appears to have been hampered by particularly dismal winter weather.
“The reduction in sales volumes for the three month period ending July 2017 reflects the dormant winter period with farmers focusing on the seasonal issues of lambing and calving, activities which dependent upon location, will continue into August and September,” REINZ rural spokesman Brian Peacocke said.
“Of interest and clearly stimulated by the recently announced increase in the milk payout and the current strong beef prices, an air of confidence, or perhaps relief, is quietly growing within the rural sector. However, in a number of areas throughout the country, that optimism has been tempered by recent persistent, heavy rainfall and extensive flooding, generating extremely difficult conditions for the wintering of cattle and calving of dairy cows in particular,” he said.
The REINZ all farm price index, which adjusts for differences in farm size, location and farming type, increased 5.6% in the three months to July compared with the three months to June.
Seven regions recorded increases in sales volume for the three months ended July from the year-earlier period.
Canterbury recorded the largest increase in sales, with an extra four sales, followed by the West Coast, which recorded an additional three sales. However, compared to the three months ended June, only one region recorded an increase in sales.