Dairy Market & Valuation | Kiwifruit Market
Dairy Market & Valuations
Values are softening at around $40 - $50/kg milk solids, supported in a number of cases by potential for some horticultural development.
The Dairy Industry is under stress despite the record low payout of $3.90 per kilogram of milk solids for the 2015/16 season, and now forecast for 2019/20 season at around $7.00.
The micro plasma bovis cattle disease is still providing some uncertainty in the industry generally which may make farms more difficult to sell in the short term. But more importantly on farm environmental regulations and compliance, difficulty in finding qualified labour, higher on farm operating costs and tighter bank lending standards are the main factors.
Very few farms have sold throughout the country in relative terms and those it the Bay of Plenty have been supported by potential horticultural development.
We assess farm values in the Bay of Plenty to be easing with dairy farm values nationally reducing.
The most recent sales indicate going concern sales prices at around $40 - $50 per kg milk solids. Further analysis indicates land without buildings and title allowance of predominantly between $35,000 to $45,000 per hectare or $40 to $45 per kg milk solids.
The size, standard of improvements, location and soil types are key factors in determining saleability and value. The subdivision potential and house site allowances provide additional value over and above the productive base and also reflect a degree of liquidity of security. More recently the demand for horticultural land has propped up the value of a number of farms in the Bay of Plenty region.
Kiwifruit Orchard values have continued to strengthen driven by the confidence in the new gold (G3) variety with good productivity and tolerance to the disease, Psa.
Green value levels now predominantly in a range of $350,000 - $450,000 per canopy hectare (including crop) with emphasis on orchard gate returns which can range predominantly from $50,000 - $80,000 per canopy hectare.
The mature gold orchard values indicate value between $1,000,000- $1,250,000 per canopy hectare (including crop). These are full producing good quality orchards with very good infrastructure. They include licence value which is assessed in excess of $300,000 per canopy hectare