"Drought-breaking rains" fostered a sharp recovery in the
price of farms in New Zealand, even as the country's important dairy sector has
seen some fall-off in milk prices.
Prices of New Zealand farms rose 14.7% in the year to the
end of April, a sharp acceleration from the 9.2% recorded in the year to March,
data from the Real Estate Institute of New Zealand showed.
The increase reflected "confidence" in the sector instilled
by an end to drought conditions which hit the country for a second successive
year early in 2014, albeit proving not nearly as severe as those in early 2013.
"Rural morale has rebounded following drought-breaking
rainfall in the northern regions," said Brian Peacocke, the institute's rural
In South Island, the "surplus of rain has been great for the
pastoral sector", although he cautioned that the storms had "impacted heavily
on some in the arable sector".
'Relief from dry
In the dairy sector, farm prices in New Zealand, the top
milk exporting country, were up by a more modest 6.1% year on year, although this
reflected in particular recent growth.
Prices in the February-to-April quarter were 5.7% higher
than in the January-to-March period.
The recovery comes despite a fall in prices, with product values
at GlobalDairyTrade, the auction run by Auckland-based dairy giant Fonterra,
falling 19.7% so far this year, reflecting improved milk production, including
in New Zealand itself, so underpinning farm revenue hopes despite lower values.
Fonterra's milk collections were 16% higher last month on
South Island and soared 51% on North Island, compared with the drought-affected
levels a year before.
The co-operative said that "rain from ex-Tropical Cyclone
Ita brought relief from the dry conditions that had been impacting volumes in
the North Island".
Fonterra volumes for the first 11 months of 2013-14, which
ends this month, were 7.7% higher than a year before.
In the dairy sector, Reinz said that there was a "good,
steady market" for farms in Northland, in the north of the country, with "stronger
prices" for good farms in neighbouring Waikato.
However, the institute noted a "quieter market" in south
eastern North Island, and, on South Island, some signs of "resistance to higher
prices" in the popular Canterbury region.
North Island's Bay of Plenty was singled out for a "strong
upturn in prices", although this reflected the market for "good quality, well
situated kiwifruit orchards".