New Zealand's agriculture industry, including its key milk
sector, faces a "positive outlook" which is set to boost investment, land
agents said, unveiling a further uptick in values of dairy farms.
The Real Estate Institute of New Zealand, Reinz, said that
while domestic sales volumes had eased back, the trend was "in line with"
historical seasonal cycles, "as farmers focus on wintering activities and the
In fact, "morale throughout the rural sector… is being
stimulated by the positive outlook for dairy, beef, lamb, venison and
horticultural products," said Brian Peacocke, the institute's rural spokesman,
although noting the wool sector as the exception, with New Zealand prices of
the fibre hit by a retreat in Chinese imports.
'Late surge of
Such sentiment was "likely to encourage continuing
investment" in these sectors, including dairy, which as a sector had seen its
highest June sales volumes since 2014, before the downturn in prices set in.
Indeed, the dairy farm market had seen a "late surge of
activity in Canterbury", a major production region in South Island.
Dairy farm prices in New Zealand, the top milk exporting
country, extended their recovery from an autumn low to stand at an index level
of 1,881 last month, up 17.7% year on year.
However, they remain 13.0% below a high in September last
The average price per hectare across all farms sold in the
three months to June 2017 was $25,993 per hectare.
Dairy market moves
The data come amid a recovery in dairy prices, which at
GlobalDairyTrade auction, run by New Zealand milk giant Fonterra, have risen by
10% year on year, despite recent setbacks.
After steady increases in the GDT auction price from March
to May, the latest two auctions returned respective decreases of 0.8% and
In the key European market, latest official data show a 1%
decrease in the bloc's average farmgate milk price in May to 32.9 euro cents
per kilogramme, but this value is 25%
higher year-on-year and 2.4% up on the five-year average.
GDT will on Tuesday hold its next auction – which Tobin
Gorey at Commonwealth Bank of Australia said "might enliven an otherwise dull