Property Talk: What is the outlook for dairy properties?
Dairy farm prices in the South Island have softened about 8% in the aftermath of falling dairy prices.
Brian Peacocke, rural spokesman for the Real Estate Institute says there is anecdotal evidence of farmers coming under pressure from banks and some properties may have come on to the market as a result.
So far there is little evidence of forced sales, except for a few cases in the North Island.
New entrants shouldn’t be too badly affected because banks would have required them to have relatively conservative balance sheets, he says.
But it might be a different story for contract milkers and share milkers who would be heavily affected.
According to Federated Farmers about 11% of dairy farmers are under pressure from banks over their mortgage.
This is up from 6.6% last August and 7.6% in November.
Federated Farmers wants New Zealand officials in Europe to be vigilant over calls for protectionism for farmers there.
The biggest issue is increased production in Europe driven by subsidies, the Feds say.
Government officials need to take the matter up through direct diplomatic channels and the World Trade Organisation – and they need to do it quickly.