A long-established South Taranaki farm in the prime Waimate Plains dairying area has been sold as a going concern for what may be a Taranaki record price of more than $15 million.

The buyers, who are from Taranaki but don’t want to be named, paid $15.1m for the 186-hectare farm, its 580-cow predominantly jersey herd, Fonterra shares, machinery, houses, and farm buildings. They took possession on June 1 for the 2015-16 dairy season.

The farm has a 50-bail rotary shed and produced almost 200,000 kilograms of milksolids last season.

Rural real estate agent Owen Mills, of First National Mills & Gibbon, of Stratford, said he was not aware of any higher price for a Taranaki dairy farm.

The sale price lined up with other recent sales in the area and was right on the mark.

The tender process for the farm attracted what he called a good level of interest, particularly in view of its timing three weeks before the end of the 2014-15 dairy season.

The buyer said such farms did not come on the market very often.

“It’s real good Waimate West country, as good as you get. It was a unique opportunity.

“Willing buyer, willing seller – the price reflects the market,” he said.

The low market value of Fonterra shares and dairy cows facilitated the sale.
Ad Feedback

Several banks approached the family to help finance the sale, which low interest rates made attractive.

“Everything lined up, except for the payout,” he said.

However, he was hopeful the payout would recover in the long term.

While he was not targeting specific production, he said there were opportunities to improve it. “We’ll make it happen as well as we’re able.”

Mills said prices for dairy farms in the sought-after Waimate Plains exceeded $80,000 a hectare last season. One farm topped $80,000/ha and another five or six fetched more than $70,000/ha.

The prices reflected the quality of the farms on offer and were probably stronger than in the past, even in the boom period of 2007-08.

Last season about 40 dairy farms were sold in Taranaki in a market that had held up strongly because buyers were confident about the long-term prospects of dairying and interest rates were attractive, he said.

By Sue O’Dowd
Source: NZFarmer.co.nz