Wednesday, Jan 13, 2016
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THE INDEPENDENT VOICE OF MID CANTERBURY
Overseas buyers ready to swoop BY NADINE PORTER
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Overseas buyers continue to hover, awaiting dairy farm sales in the district, with experts now predicting a recovery in the GlobalDairyTrade auction is going to be later than expected. PGG Wrightson Mid and South Canterbury real estate manager Robin Ford said while Southland was experiencing a high number of dairy farm sales, Mid Canterbury only had around eight to 10 farms for sale at present, but he thought more farms would come on the market after May should the global auction not reach $US3000 per tonne – the price needed to meet Fonterra’s revised payout of $4.60 per kilogram of milksolids. Overseas buyers, particularly from Europe and the United Kingdom, continued to show “good interest” in buying farms in Mid Canterbury, he said. “I think they are waiting to see if there is a movement downwards in the market before they come in full. At this stage they have probably been rail sitting for the past six months to see what will happen, but they are still there.” Last week Fonterra’s forecast payout was put in doubt after milk powder prices fell 4.4 per cent at the first GlobalDairyTrade auction of the year. Mr Ford said if auction prices don’t get near the magic $US3000 per tonne mark by May, more dairy farms in Mid Canterbury could be put up for sale. “If the payout starts to dip again I think you will see more farms come on to the market. If it lifts to nearer the $5 per kilogram mark I think most of them will hang in there, but if it slips below $4.60 as forecast, you might see a few more decide that may-be they are better off doing other things.” Currently Southland has 41 farms for sale on Trade Me – with many of them being equity partnerships. After visiting
recently Mr Ford said the province had two disastrous spring seasons with milk production down, decreased feed available and lower lambing percentages. “That’s why you’re seeing so many of them on the market.” With land $10,000 a hectare less than Canterbury and not needing irrigation, the province had been attractive to sharemilkers and farmers who lacked equity. Federated Farmers Mid Canterbury president Willy Leferink said the current situation was frustrating for Mid Canterbury farmers and he believed there would be the “odd portfolio” that might sell farms to trim their operations. “But I think people will not sell at a bargain if they can help it. “It’s stressful and slowly the banks are putting pressure on to perform, but long-term demographics are good … I don’t think we will see forced sales yet.”
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