South Westland farm sale demonstrates appetite for dairy

News release - South Westland farm sale demonstrates strong appetite for dairy

A fully self-contained Whataroa dairy farm carrying 400 milking cows sold for $6.5 million last month, demonstrating interest in acquiring rural property remains keen, said the salesperson who oversaw the transaction.

Dave Nolan of PGG Wrightson Real Estate, Greymouth sold the 320 hectare property, which equated to $21,500 per effective hectare.

“This farm was only on the market for three days before selling to Southland buyers who have been looking for West Coast property for some time and decided that it ticked all the right boxes for them. At that price, it was slightly ahead of the value of similar properties sold locally in the past few months.

“Its high-quality improvements, including a 60 bail rotary dairy shed and a considerably extended and remodelled residence, plus the grazing, cropping and wintering flexibility that the mixture of soil provides, made this an attractive property,” he said.

Producing 161,000 kilograms of milksolids last season and projected to achieve 180,000 kilograms in 2014/15, the farm had a 2011 rateable value of $4.5 million.

Dave Nolan said, despite short-term challenges for farmers around projected returns, enthusiasm for investment in dairy farms remains high.

“Prior to Westland Milk’s payout announcement in late August, we fielded increasing enquiry from Southland farmers looking to buy or extend into our region. This sale indicates that interest is still there and likely to re-emerge as farmers adapt to the reduced payout. It is apparent that lower capital entry costs, plus the advantage that dairy company shares are included in the sale price for local farms, makes the West Coast a viable alternative for those wishing to grow and expand their dairy farming business. Demand to do that remains particularly strong, as this sale indicates,” he said.

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